The Week on Wall Street
Despite news of another COVID-19 vaccine candidate, stocks were mixed amid investor anxiety over an increase in new infections and economic lockdowns.
The Dow Jones Industrial Average fell 0.73%, while the Standard & Poor’s 500 declined 0.77%. The Nasdaq Composite index rose 0.22% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 1.42%.[1][2][3]
Groundhog Week
The announcement of another potential COVID-19 vaccine ignited strong gains to begin the week. But, like the week that preceded it, the gains sparked by the vaccine news were eroded in the following days as worries over the economic impact of new infections moved to the fore.
The market has been grappling with conflicting narratives. One is the optimistic view that, with COVID-19 vaccines apparently near at-hand, the return to economic normalcy grows ever closer. That hopeful outlook has been offset by anxiety over new infections, rising hospitalizations, and some local and state lockdowns.
These crosscurrents kept stocks range bound for the week, with the technology sector and small and mid-size stocks lending support to the overall market.
Powell Sounds a Warning
In a speech last week, Federal Reserve Chairman Jerome Powell warned that the nationwide increase in COVID-19 cases could hamper economic activity in the upcoming months. He expressed concern that consumer spending may trend lower despite efforts to control the spread of infections.[4]
Powell once again voiced his support for additional fiscal stimulus to assist small businesses, state and local governments, and the unemployed. He also said that even after full economic recovery, some businesses and workers may wrestle with an economic landscape altered by the coronavirus.
[1] The Wall Street Journal, November 20, 2020
[2] The Wall Street Journal, November 20, 2020
[3] The Wall Street Journal, November 20, 2020
[4] CNN.com, November 17, 2020
