John Hancock: Weekly Market Recap Ended December 25th
Supercharged small caps
Small-cap stocks again outperformed their large-cap peers for the week as the Russell 2000 Index, a small-cap benchmark, closed above the 2,000-point level for the first time and extended the equity category’s fourth-quarter rally. Since the end of September, the index has gained 33%; it surpassed its prior record in November.
Holiday holding pattern
There was no so-called Santa Claus rally over the holiday-shortened trading week as the major stock indexes posted mixed results heading into the closing days of 2020. Stocks have largely been stationary over the first four weeks of December, in contrast with November, when the S&P 500 gained nearly 11% and surged to a record high.
New claims for unemployment benefits remained above 800,000 for the third week in a row, following a stretch of nearly two months in which they were below that level. However, the latest weekly tally of 803,000 claims was down from a revised figure of 892,000 in the previous week.
2021 sector outlook
Looking ahead to 2021, many Wall Street analysts have a positive view of three equity sectors: energy, healthcare, and information technology. Those are the sectors that had the highest percentages of “buy” ratings from analysts, as of late December, according to FactSet. Those with the lowest percentages of buy ratings: real estate, consumer staples, and financials.