The stock market ended higher last week as the nation dealt with the siege of the D.C. Capital and new economic data that is causing concern. What I find most interesting is that, both events barely fazed advancing stocks.
The Dow Jones Industrial Average was up over 600 points on Wednesday when the chaos in D.C. started. By the end of the trading day when the mayhem was at its peak, the stock market retreated slightly ending the day up over 400 points. More bad news came on Friday when the Labor Department released December’s jobs data. Employers cut 140,000 jobs in the last month of 2020, the first decline since the pandemic hit the country last spring. Not surprising, restaurants and bars drove the decline. Other entertainment venues where crowds gather and the hospitality industry were also negatively affected.
What the market did focus on was the election results in Georgia, which resulted in Democrats controlling both houses of Congress. This strengthens president-elect Joe Biden’s agenda and will likely result in another round of fiscal stimulus checks going to tax-payers. The election results have also caused a number of analysts to increase growth prospects for the U.S. economy. Goldman Sachs now expects growth of 6.5% in 2021 compared to their previous forecast of 5.9%. They also expect a stimulus package of $750 billion in late February or March.
Despite all the challenges we still face, the market is focusing on the recovery more than anything. Let’s hope that trend continues.
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