Wall Street ends 2020, a prosperous and tumultuous year, on all time highs

Après des records, Wall Street poursuit sa marche en avant
December 30, 2020
Dow futures slide lower Tuesday morning after stocks first decline to start a year since 2016
January 5, 2021

Wall Street ends 2020, a prosperous and tumultuous year, on all time highs

The New York Stock Exchange closed on new records its last session of 2020, a booming and tumultuous year for the financial markets, with the slump caused by the Covid-19 pandemic.

According to final results at the close of poorly supplied year-end trade, the Dow Jones set a new record, after that of the day before, at 30,606.48 points, up 0.65%.

The broader S&P 500 index also posted a high of 3,756.07 points, up 0.64%. The Nasdaq, with strong technological coloring, advanced 0.14%, rising to ten points from its previous record, to 12,888.28 points.

“The session started off mixed with investors taking their profits but after that the market reissued what it has done throughout the year and ended on a high note,” commented Peter Cardillo, Spartan Capital Securities.

If the Dow Jones and the S&P 500, index more representative of the American market, crossed new highs Thursday, the Nasdaq which concentrates the large values ​​of the tech advanced more slowly.

“We saw a small rotation at the end of the year, with investors choosing instead to leave technology” to place themselves in stocks of the traditional economy, added the analyst.

“If for Main Street the year has been horrible, for Wall Street, it has been fantastic!”, Concluded Patrick O’Hare of Briefing.com.

On Friday, the markets will be closed to observe the New Year.

The stock market ended the year with strong gains even as the pandemic brought the world’s largest economy to its knees and thrown millions of people out of work.

“The stock market performed very well in 2020 because it anticipates the recovery of 2021” with the arrival of vaccines against the coronavirus, a hoped-for return of consumer confidence and the support of stimulus plans around the world, said summary Patrick O’Hare.

Encouraged by the ultra-accommodative monetary policy of the US Central Bank (Fed) which injected billions of dollars of liquidity into the financial system and kept interest rates close to zero, investors turned overwhelmingly to equities, in priority those of the tech.

– What about 2021? –

Despite the March crash caused by the outbreak of the epidemic when the Dow Jones experienced the worst session in its history on March 16 (-13%) after the 1929 crisis and the October 1987 debacle, the index blue chip stocks finally posted an increase of 7.25% over the year. The broader S&P 500 index gained 16.26%.

But it is the Nasdaq which will have posted the most spectacular progress with a jump of 43.64% over the year.

Opinions are divided on what 2021 has in store.

For Marris Ogg of Tower Bridge Advisors, Wall Street has a bright future ahead: “the results of companies will be better than what we think in the second part of the year (…) as and consumer confidence is returning with vaccines against Covid-19, “said the analyst.

The weak dollar, at its lowest for two and a half years, will “help American businesses and there is enormous support for the economy across the world,” she continued, adding that for the first time for a long time, there has been “a synchronized recovery, whether in the United States, Europe or China”.

But for Briefing.com’s Art Hogan, the market could “be vulnerable to a 10% drop in the first two months of the year,” with good news from vaccines and stimulus packages already, he said, anticipated. in stock prices.

Among the most phenomenal increases, boosted by a digitization of the economy, are the titles of the big and newcomers to tech.

Over the year, Google (Alphabet) and Facebook gained over 30%, Netflix nearly 70%, Apple 80%, and Tesla simply multiplied its value by seven.

As for yields on 10-year Treasury bills on the bond market, they fell by half year on year, to 0.9132% Thursday, in the wake of the Fed’s rate cut.