Hello and welcome to this week’s Jones Financial Blog! Our goal at Jones & Associates is to help keep you up to date with interesting current economic/market happenings as well as some proprietary portfolio happenings. Knowledge is power and thought we would share some of ours with you. Enjoy!
All data is for the week ended November 13, 2020.
Equities started the week with very strong gains as Pfizer (PFE) announced its vaccine success to fight COVID-19 with 90% effectiveness; initial doses are expected in a matter of weeks facilitated by a deal with the U.S. government to pay them $1.95 billion upon receipt of the first 100 million doses. (1) Some of the optimism faded as the week progressed, but most indices finished the week with gains. The S&P 500 rose 2.21%, the Russell 2000 climbed 6.13% while the NASDAQ eased down 0.53%. Overseas, the developed markets (MSCI EAFE) added 3.89% as the emerging markets (MSCI EM) rose 1.03%. Small and mid-cap stocks outperformed large caps, and value outperformed growth. Consumer discretionary and technology stocks lagged the markets while the best sectors were energy and financials. (2)
Bond values fell as interest rates rose on expectations of an improved economy led by the COVID vaccine and a shift away from fixed income toward stocks. The benchmark 10-year U.S. treasuries yield rose from 0.82% last Friday to as high as 0.97% on Monday. It finished the week at 0.89% as those bond values declined 0.45%. (3)
The price of West Texas crude oil rose 8.0% last week (4) as investors looked past the current situation and became more optimistic for increased energy demand in a COVID-vaccinated world.
Core inflation (excluding volatile food and energy) for the month of October was 1.6% on a year-over-year basis. On a month-over-month basis it was flat, and slightly below expectations for a 0.1% rate. (5)
Weekly new jobless claims fell again to 709,000 from 757,000 the week before. This marked the fourth consecutive week of improvement in employment. (6)
Proprietary portfolio happenings:
Company News (7)
Alibaba Group Holding Ltd. (BABA), a G33 holding, declined 13.0% following news that their proposed spin-out of a financing division (Ant Group) would be prohibited by the Chinese government. Most saw the abrupt halt or potential delay of the deal as a result of rising regulation of Chinese companies. (8)
Parsley Energy (PE), a Core Select, Contrarian Choice and Energy Sector holding, rose 18.8% last week and Phillips 66 (PSX), a Contrarian Choice and Energy Sector holding, added 25.9% last week on improving outlooks for energy demand as a result of the COVID vaccine(s).
Did You Know? A 2,000 year old Roman shipwreck was discovered off the northern Italian coast in 2012. The contents were well so well preserved that even the food – wine, oil, grain and pickled fish – was intact in over 200 ceramic jars. The ship was found in the seabed about 200 feet below the surface.
Sources: (1) Pfizer press release 7-22-20, (2) JP Morgan Weekly Market Recap 11-16-20, (3) Franklin Templeton “What Happened Last Week” 11-16-20, (4) Oilprice.com, (5) US Bureau of Labor Statistics 11-12-20, (6) US Department of Labor 11-12-20, (7) All weekly changes in company stock prices: Yahoo Finance, (8) Business Insider “China’s Xi Jinping Personally Halted Ant’s Record Breaking $37 billion IPO” 11-13-20