Share prices surged in the US during November, driven up by significant progress in Covid-19 vaccine developments. Investors drew encouragement from positive reports about the two vaccines developed by US companies Pfizer and Moderna.
- Joe Biden won the US Presidential election
- Runoff elections in January will determine control of the Senate
- The DJIA breached 30,000 points for the first time
To view the series of market updates through November, click here
Share prices surged in the US during November, driven up by significant progress in Covid-19 vaccine developments. Investors drew encouragement from positive reports about the two vaccines developed by US companies Pfizer and Moderna amid hopes that an effective vaccine would eventually bring an end to shutdowns and social distancing and allow the economy to recover.
“November was dominated by political developments”
Aside from the prospect of a vaccine on the horizon, November was dominated by political developments as the US Presidential elections took place. After several days of wrangling and recounts, Joe Biden emerged as the victor, and will become the 46th US President on 20 January 2021. His victory was soured, however, by President Trump’s continued allegations of electoral fraud; while he eventually agreed that he would co-operate with the incoming Biden administration, he reiterated his accusations of fraud. The Electoral College will certify its votes on 14 December. Meanwhile, although the Democratic Party managed to hold on to the House of Representatives, it remains unclear which party will control the Senate until runoff elections take place in Georgia in January.
Investors also welcomed the news that President-elect Biden had nominated former Federal Reserve (Fed) Chair Janet Yellen as his Treasury Secretary. If her nomination is confirmed, she will be the first woman to lead the US Treasury Department in its 231-year history.
Treasury Secretary Steven Mnuchin refused to approve an extension of the majority of the Fed’s credit programmes and asked the Fed to return any unused funds granted under the CARES Act passed for Covid-19 relief. The Fed said it was disappointed by the ruling.
The Dow Jones Industrial Average Index climbed by 11.8% over November and rose above 30,000 points for the first time during the month. The S&P 500 Index rose by 10.8% and the Nasdaq Index increased by 11.8%. The best-performing S&P industry sectors were energy – which rose by over 26% on the month – financials, industrials, materials, and information technology, which all posted double-digit gains.
The US economy added 638,000 new jobs during October; The rate of unemployment dropped from 7.9% to 6.9%, and the number of unemployed people fell by 1.5 million to 11.1 million. Nevertheless, although the Bureau of Labor Statistics (BLS) has now reported a decline of both measures for six consecutive months, it is worth noting that they are almost twice their February levels.
A version of this and other market briefings are available to use in our newsletter builder feature. Click here
