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    Capital Markets | 4 min read

    Market Commentary: Week of November 9, 2020

    Last Week:

    Equity and corporate bond markets surged off the results from Election Day last week. While the winner of the Presidency was not known until Saturday, former Vice President Biden seemed to be destined to win once all the votes were counted, and a Republican-led Senate seemed assured. Gridlock! Markets rejoiced, as it was perceived that D.C. was ready to return to a state of impotency. Gridlock means no new taxes, no new legislation getting prescription drug prices under control, no legislation regulating tech powerhouses, etc. Investors seem to forget that now, President-Elect Biden has a ton of Trump executive orders covering environmental regulation, energy production, consumer finance regulation, and many more that he can simply overturn in January. Moreover, a Biden Department of Justice can hotly pursue anti-trust claims if they chose to. That should rankle the likes of Facebook. Meanwhile, the markets seem to have put election chaos behind it, even as President Trump refuses to concede. We have a feeling that his reaction to a loss would end up this way and was priced in. Longer duration Treasury notes and bonds rallied off gridlock, as well as the fact that the loss of a “Blue Wave” is interpreted as a smaller COVID-19 stimulus/relief bill.

    • The S&P 500 increased 7.3% for the week. The average daily move for the week was 1 .44%.
    • The NASDAQ gained nine percent for the week. The average daily move for the week was 1.75%.
    • The two-year Treasury was flat for the week, closing at .15% Friday.
    • The 10-year Treasury decreased five basis points for the week, closing at .82% Friday.
    • The VIX Index decreased 35% for the week, closing at 24.86 Friday.
    • The MOVE Index fell 36% for the week, closing at 39.88 Friday.
    • Five-year Investment Grade Corporates (as measured by Markit CDX) tightened 12 basis points for the week, closing at 53 basis points Friday. High-yield corporate debt, as measured by Markit CDX, tightened 63 basis points, closing at 370 basis points on Friday.
    • U.S. Dollar Index decreased 1.9%, closing at 92.23 on Friday.
    • WTI Crude decreased four percent for the week, using the December WTI Futures contract, closing at 37.14.
    • Gold, as measured by the December 2020 futures contract, increased 3.8% for the week—closing at 1,951 on Friday.

    The Week Ahead:

    Equity markets around the world are skyrocketing this morning as Pfizer’s COVID-19 vaccine has shown to be 90% effective in a large study. This is great news—it feels like we just won World War II. Let’s hope the great news keeps coming. The one thing to remember is, the increased likelihood of a vaccine means less relief for the millions already affected by COVID-19. A vaccine next month, and broad distribution by the second quarter of 2021 is awesome, but it does not help people who are hurting now. Additionally, like the end of a war fought on our own soil, spending habits have changed, and we’ll see how many lost businesses can be reborn. Moreover, for many, the devastation of their finances does not go away with a vaccine. The vaccine also probably means that the Republican-led Senate will dig their heels in further with regard to stimulus/relief legislation. On the other hand, for those who can come out of this pandemic in good shape, there could be a surge in spending as society frees up with a vaccine—we shall see. Right now, we finally have something to feel good about in the war on COVID-19!


    An index is unmanaged and not available for direct investment. Definitions sourced from Bloomberg.

    • The Bloomberg Barclays Global Aggregate Negative Yielding Debt Market Value Index represents the portion of the Bloomberg Barclays Global Aggregate Index that measures the aggregate value of global debt with a negative yield.
    • The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.
    • The NASDAQ Composite Index is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market and Capital Market. The index was developed with a base level of 100 as of February 5, 1971.
    • The Cboe Volatility Index® (VIX) is a calculation designed to produce a measure of constant, 30-day expected volatility of the US stock market, derived from real-time, mid-quote prices of weekly S&P 500® Index (SPX) call and put options with a range of 23 to 37 days to expiration.
    • The ICE BofA MOVE Index is a yield curve weighted index of the normalized implied volatility on 1-month Treasury options. It is the weighted average of implied volatilities on the CT2 (Current 2 Year Government Note), CT5 (Current 5 Year Government Note), CT10 (Current 10 Year Government Note), and CT30 (Current 30 Year Government Note), with weights 0.2/0.2/0.4/0.2 respectively.
    • The Markit CDX North America Investment Grade Index is composed of 125 equally weighted credit default swaps on investment grade entities, distributed among 6 sub-indices: High Volatility, Consumer, Energy, Financial, Industrial, and Technology, Media & Tele-communications. Markit CDX indices roll every 6 months in March & September.
    • The Markit CDX North America High Yield Index is composed of 100 non-investment grade entities, distributed among 2 sub-indices: B, BB. All entities are domiciled in North America. Markit CDX indices roll every 6 months in March & September.
    • The U.S. Dollar Index (USDX) indicates the general international value of the USD. The USDX does this by averaging the exchange rates between the USD and major world currencies. Intercontinental Exchange (ICE) US computes this by using the rates supplied by some 500 banks.


    Investing involves certain risks, including possible loss of principal. You should understand and carefully consider a strategy’s objectives, risks, fees, expenses and other information before investing. The views expressed in this commentary are subject to change and are not intended to be a recommendation or investment advice. Such views do not take into account the individual financial circumstances or objectives of any investor that receives them. All indices are unmanaged and are not available for direct investment. Indices do not incur costs including the payment of transaction costs, fees and other expenses. This information should not be considered a solicitation or an offer to provide any service in any jurisdiction where it would be unlawful to do so under the laws of that jurisdiction. Past performance is no guarantee of future results.

    © 2020 SWBC. All rights reserved. Securities offered through SWBC Investment Services, LLC, a registered broker/dealer. Member FINRA & SIPC. Advisory services offered through SWBC Investment Company, a Registered Investment Advisor, registered as such with the US Securities & Exchange Commission. SWBC Investment Services, LLC is under separate ownership from any other named entity. SWBC Investment Services, LLC a division of SWBC, is a nationwide partnership of advisor.

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    John Tuohy

    John Tuohy is CEO of SWBC Investment Services, LLC, a Broker/Dealer and SWBC Investment Company, an SEC Registered Investment Advisor (RIA). In his role, John is responsible for identifying, developing, and executing the division's strategic plan and all business development, sales, and marketing activities.

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