John Hancock: Weekly Market Recap Week Ended January 1

A tumultuous 2020

A year that was weighed down by a pandemic and a sudden end to the longest bull market in history nevertheless ended positive overall for the stock market. The major indexes produced widely varying gains, with the NASDAQ adding nearly 44% on a price basis, the S&P 500 around 16%, and the Dow about 7%.

Small-cap record

While small-cap stocks trailed their large-cap peers for the week, they nevertheless wrapped up a record-breaking quarter. The Russell 2000 Index, a small-cap benchmark, climbed about 31% over the final three months of 2020, the biggest quarterly gain recorded in data going back to 1979.

Tech dominance

Three giants—Apple, Amazon.com, and Microsoft —generated 53% of the S&P 500′s total return in 2020, according to S&P Dow Jones Indices. Furthermore, information technology—just one of 11 sectors overall—accounted for about 69% of the index’s total return.

As January goes …

Historically, January’s stock market performance has been a strong indicator of what may be in store for the rest of the year. In fact, more than 70% of the time the S&P 500 has posted a positive return for the year after gaining ground in January or has gone on to post an annual loss when the market has declined in the first month, according to S&P Dow Jones Indices.