New Record Highs

By Matthew Klein | Friday, November 13

Lucky 13th. It’s supposed to be unlucky when a Friday falls on the 13th day of a month. American stock markets didn’t get the memo, with both the S&P 500 large-cap index and the beleaguered Russell 2000 small-cap index hitting record highs. A whopping 468 of 500 components in the S&P were up today, as were all 11 sectors. The weakest sector—technology—was still up 0.9% on the day. Energy, industrials, and real estate were all up more than 2%. The S&P as a whole was up 1.4%, while the Russell was up 2.1%.

It’s not clear what exactly prompted the burst of optimism. But the biggest winners were all companies that had been hammered by the pandemic, such as MGM Resorts International (up 9.3%), Host Hotels and Resorts (up 8.5%), Marathon Petroleum (up 8.2%), and Simon Property Group (up 8%), which suggests that investors are continuing to upgrade their outlook for a vaccine. The sooner normalcy returns, the better it will be for gambling, travel, oil refining, and indoor malls. Among the few stocks that fell, only four names lost more than 1%.

Friday’s strong performance has capped a remarkable run. So far this month, there have been 10 trading days. In that two-week span, the S&P has gained 9.6% while the Russell has gained 13.4%. Not since October 1982 has the S&P risen more in the first 10 trading days. Back then, a nearly three-year recession was coming to an end and the Federal Reserve had slashed short-term interest rates by almost 10 percentage points.

Another striking statistic: The stock market has done better since this U.S. election than over any equivalent period following a U.S. presidential election since the data began being recorded in 1928. Since Nov. 3, 2020 the S&P 500 has gained 6.4%, narrowly beating out the 6.3% gain in the ten days following Ronald Reagan’s victory over Jimmy Carter in 1980.

Stocks in much of the rest of the world have done even better over the past two weeks. The STOXX 600 was up 12.5%, Brazil’s Bovespa was up 11.5%, the Nikkei 225 was up 10.5%, and the KOSPI Composite was up 10%.

The rally in risky assets has also extended to oil and copper, while havens such as gold and silver have lost value. Brent crude is up 14.2% over the past two weeks, although it fell 1.7% today. Copper is up 4.3% over the past two weeks after gaining 1% today.

Watch our TV show on Fox Business Friday at 10 p.m. or 11:30 p.m. ET; Saturday at 10 a.m. or 11:30 a.m.; or Sunday at 7 a.m., 10 a.m., or 11:30 a.m. This week, get insights from former CDC official Richard Besser and economist Torsten Sløk on what to expect next as development of a Covid-19 vaccine progresses.