Market Recap
US Markets:
Markets surged for the 2nd day in a row amidst more vaccine-related mania, optimism for a strong economic recovery in 2021, easing of political uncertainty with the Trump administration finally beginning the transition process for President-elect Joe Biden, and approval of Joe Biden’s Treasury Secretary pick- former Fed Chief Janet Yellen.
The Dow Jones rallied 454 points, or 1.5%, and broke past 30,000 for the first time in its history. At its high of the day, the Dow traded at 30,116.51.
The S&P 500 also notched a record close and climbed 1.6%, while the Nasdaq advanced 1.3%. The small-cap Russell 2000 once again led the way and hit an all-time high, gaining 1.9%.
After today’s session, the Dow is now up more than 13% for the month of November- good for its biggest monthly gain since 1987. The S&P 500 and Nasdaq are also up 11.2% and 10.3%, respectively. This would be both of their best monthly performances since April.
Data came in today that also showed US housing prices rise at a record pace. The average prices of single-family houses with mortgages guaranteed by Fannie Mae and Freddie Mac in the United States jumped 1.7% from a month earlier in September 2020, following a 1.5% rise in August. This easily beat market forecasts estimating 1.1% growth, and was the largest monthly gain since comparable records began in 1991.
Cryptocurrency:
It was another strong day for cryptocurrencies as Bitcoin not only broke past its $18,500 resistance level, but also broke past $19,000. Its rapid charge towards $20,000 continues. Bitcoin’s value has more than doubled this year, and has not traded this high since early-January 2018. In fact, Bitcoin has rallied 75% in less than three months, and gained almost 400% since March. With coronavirus stimulus measures, validation from public companies such as Square and Paypal, and interest from both retail investors and major investors, the case for Bitcoin has arguably never been this bullish before. Billionaire investor Mike Novogratz also predicted that the price of bitcoin would hit $65,000 eventually. XRP, however, was once again the biggest winner today. After XRP skyrocketed by over 21% yesterday, it surged by another 15.47%. XRP has been the unheralded crypto winner of the last month. In the past month alone, the price of XRP has rallied a whopping 105% due to a rise in unique addresses, buybacks from Ripple, and the possibility of a new product release.
Overall Market:
European stocks rallied today with Frankfurt’s DAX closing up 1% for a 9-month high. Other major European indexes also gained between 1.2% and 2%. Investors continued cheering vaccine hopes, and also cheered upbeat revised GDP figures for Germany. The German business climate sentiment also dropped less than expected after the Ifo Business Climate indicator for Germany dropped to 90.7 in November 2020 from a downwardly revised 92.5 in the previous month. This still remains above market expectations of 90.1.
WTI crude futures skyrocketed today and were up more than 4% to trade around $44.9 a barrel. This is the highest crude has traded at since March 6th, and is solely due to COVID vaccine optimism spurring a quicker recovery for fuel demand. Rhodium also hit an all-time high and skyrocketed to $16,100 an ounce. The rise in price is largely due to demand from the auto industry due to shifting regulatory requirements for emission, and also due to the cut in South African supply output from mine shutdowns. South Africa accounts for 80% of global rhodium mined in the world.
WHATS UP
Recovery stocks led the way again, as has been the pattern as of late. Value stocks have been on fire this month amidst what seems to be an influx of weekly positive coronavirus vaccine data. On Tuesday, the iShares Russell 1000 Value ETF (IWD) gained 2.1% and outperformed its growth counterpart, which advanced 1%.
Chevron rose 5% to lead the Dow higher today, while JPMorgan Chase and Goldman Sachs each rose 4.6% and 3.8%, respectively.
