Happy New Year! | Daily Market Update

Thursday, December 31, 2020

Happy New Year to all from LPL Research!

We made it through a very challenging 2020.  Have a happy, healthy, and safe 2021.

Top Story

What a big end of year rally means. The S&P 500 Index is up more than 14% in the final two months of the year—the best end of year rally since World War II. This could bode well for next year, as the previous five times the final two months were up at least 10% saw the next year higher every single time. We discuss this more today on the LPL Research blog.

Daily Insights

Stocks little changed. In the wake of the Dow Jones Industrials closing at a new record high Wednesday, US stocks show marginal movement at the opening of the year’s last trading day.

  • Market participants will be keeping an eye on any progress for additional stimulus and the outcome of the Georgia run-off next week.
  • European stocks are fractionally lower during midday trading.
  • Asian markets finished their session mixed; the China Shanghai Composite finished over 1.5% higher.

Jobless Claims Beat For Second Consecutive Week. Weekly jobless claims beat expectations as 787,000 Americans filed for unemployment insurance according to the US Department of Labor. The consensus estimate was for 830,000 filings. Moreover, continuing claims beat expectations, with just under 5.22 million remaining on unemployment vs. the estimate of 5.39 million.

January 1, 2021: LPL Financial and the stock and bond markets will be closed January 1. Normal business hours will resume on Monday, January 4th.

Technical update. The energy sector led a modest bounce back for stocks on Wednesday. The US dollar made new 52-week lows and is now just 1.5% from its 2018 lows. While we remain bearish on the dollar, we would note that speculators net position in ICE US Dollar futures contracts is the most short since 2011, a potentially bullish contrarian signal, and the latest lows have yet to be confirmed by momentum.

LPL Research in the Media

LPL Research on CNBC. LPL Financial’s Ryan Detrick joined Brian Sullivan on Power Lunch yesterday to discuss the strong end of year rally.



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