Stocks soared last week as investors anticipated that a split Congress would raise legislative hurdles to changing corporate taxes and adjusting regulatory oversight of big technology companies.
The Dow Jones Industrial Average jumped 6.87%, while the Standard & Poor’s 500 tacked on 7.32%. The Nasdaq Composite index surged 9.01% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 7.65%.1,2,3
Bulls Take Charge
Investors were buoyed by Congressional results that indicate that the next president would have to work with a divided Congress. Though a divided Congress might result in a smaller potential stimulus package and continued gridlock, investors seemed to believe that was outweighed by a diminished risk of higher taxes, greater regulation, and policy initiatives that might be challenging to businesses.
Stocks took a pause to close out the week, even as a solid jobs report saw the unemployment rate fall a full percentage point to 6.9%.4
The 10-year Treasury note rose as high as 0.942% during after-hours trading on election evening and dropped to 0.768% by the end of normal trading hours on Wednesday.5
THIS WEEK: KEY ECONOMIC DATA
Source: Econoday, November 6, 2020
THIS WEEK: COMPANIES REPORTING EARNINGS
Source: Zacks, November 6, 2020
1. The Wall Street Journal, November 6, 2020
2. The Wall Street Journal, November 6, 2020
3. The Wall Street Journal, November 6, 2020
4. The Wall Street Journal, November 6, 2020
5. The Wall Street Journal, November 5, 2020
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Weekly Market Insights: Markets React to Election
November 10, 2020