Nov. 23-27, 2020
What happened last week
Market-friendly developments supported milestones in Canada and the U.S.
In a holiday-shortened week, with U.S. markets closed Thursday and part of Friday for American Thanksgiving, investors embraced a string of positive news stories that pushed the Dow Jones Industrial Average over the 30,000 point mark for the first time, and propelled Canada’s TSX back into positive territory on a year-to-date basis.
AstraZeneca reported its COVID-19 vaccine is “highly effective”
For the third Monday in a row, encouraging findings from late-stage coronavirus vaccine trials boosted markets. Investors and medical experts are increasingly optimistic that a vaccine will soon be widely available. The AstraZeneca Plc vaccine, currently under development in partnership with Oxford University, requires two dosages and showed a 90% efficacy rate. This comes on the heels of similar reports from Pfizer Inc. and Moderna Inc. whose vaccines both showed a 95% efficacy rate.
Adding to the positive momentum, a top official from the U.S. government’s vaccine development team said the U.S. Food and Drug Administration is likely to approve Pfizer Inc.’s vaccine by mid-December. This helped all four major North American indexes close in positive territory Monday.
The Dow Jones Industrial Average surpassed 30,000 points
Markets continued to rise on what became a historic Tuesday. A combination of news sent the Dow Jones Industrial Average to a record high, reaching 30,116 in intraday trading, before settling at 30,064. It’s been 218 trading days since the Dow hit its previous milestone (29,000) on Jan. 15. Vaccine optimism helped, but the ultimate driver of market sentiment came when outgoing President Donald Trump signalled that President-elect Joe Biden could formally begin the transition of power. In addition, investors welcomed reports that Biden planned to select former U.S. Federal Reserve chair Janet Yellen as Treasury Secretary.
Tuesday was also historic in Canada, as the country’s benchmark index finally recouped all losses from the lows of March, crossing 17,065 points and turning positive on a year-to-date basis. According to a report by Bloomberg, the index is up 53% from its lowest point in 2020 and has regained $893 billion in market value.
Momentum waned slightly on Wednesday with both the Dow and the S&P 500 closing slightly off the previous day’s highs. U.S. markets were closed on Thursday, but by week’s end, all four major North American indexes marked gains over 2%.
The stock and bond market*
|Dow Jones Industrial Avg.
|S&P 500 Index
| 10-yr GoC Yield
|10-yr U.S. Treasury Yield
|WTI Crude Oil (US$/bbl)
|Bank of Canada Prime Rate 2.45%
*Weekly performance ending November 27, 2020. Sources: www.bloomberg.com, www.bankofcanada.ca and www.treasury.gov.
U.S. and Canadian economic data: In addition to the next reading of the weekly U.S. jobless claims (which have been up for two weeks in a row), U.S. manufacturing data will give a further indication on the pace of the economic recovery. In Canada, the focus will be on October’s trade deficit numbers.
Circle these dates
- Dec. 9: Bank of Canada interest-rate announcement
- Dec. 15-16: U.S. Federal Reserve meetings and statement
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