Stocks Surge Election Day Week (and this morning) – Monday Morning Market Memo – November 9, 2020

Stocks Surge Election Day Week (and this morning) – Monday Morning Market Memo – November 9, 2020

Good morning,

The stock market surged last week, with all three of the major indexes posting strong gains during a week dominated by election headlines.  Despite the uncertainty last week, the Dow Jones Industrial Average rose 6.9% to 28,323, the NASDAQ Composite roared 9% higher to 11,895, and the Standard & Poor’s 500 Index jumped 7.3% to finish the week at 3,509.

Investors and market participants come in all colors – red, blue, purple – mostly though they like the color green (as in the color of money).  This is a stock market memo and of course not political.  Naturally though, we discuss how major events, including the election, impact the financial markets.  The market last week was pricing in a Biden presidency and a republican controlled Senate.

Judging by the notable market gains, consensus opinion last week seemed to happily unite around the belief that a divided government would serve investors just fine.  Market participants were factoring in the likelihood of a stimulus package of some sort, without a major change in tax policy or the regulatory environment.  Also keep in mind the Federal Reserve Bank continues to keep monetary policy in stimulus mode, which is also supporting stock prices.

Looking to the week ahead, while the election is over, earnings season has a little bit longer to go.  Notable and interesting companies scheduled to report this week include Beyond MeatAdvance Auto PartsMcDonald’sLyftVroomWalt DisneyCisco SystemsApplied MaterialsTencent Holdings and Draftkings.

Futures trading last night indicated the market would open positive this morning, following the trend and rationale that it coalesced around last week.  However, breaking news this morning is now taking center stage as pharmaceutical company Pfizer announced its vaccine candidate is 90% effective, with the CEO saying “today is a great day for science and humanity.”  Wall Street is cheering the news as well (as the Dow Jones Industrial Average is currently trading approximately 1,100 points higher)!

All the best – Southport Station Financial Management, LLC