President Biden signed a $1.9 trillion pandemic relief bill into law. Inflation worries eased on tame price data. Adequate demand for 10-year and 30-year bonds auctioned by the U. S. Treasury kept bond yields in check. Stock prices rose to new highs amidst this positive backdrop.

President Biden signed a $1.9 trillion coronavirus relief package, called the American Rescue Plan Act of 2021, into law on Thursday. The plan includes direct payments of up to $1,400 to most Americans. It also includes $350 billion in assistance for state & local governments and $20 billion for vaccinations.

Data for the Labor Department eased inflation worries. The data showed consumer and producer price indexes rose 0.4% and 0.5%, respectively in February, in line with economists’ forecasts. The CPI and PPI were up 1.7% and 2.2%, respectively on an annualized basis.

The U. S. Treasury auctioned $120 billion on bonds last week. Buying interest in the closely watched 10-year and 30-year bond auctions was adequate.

Tame inflation and a satisfactory Treasury auction helped the yield on the 10-year bond to fall as low as 1.50% after starting the week at 1.55%. The yield, however, spiked to close the week at 1.64% after the stimulus plan was approved.

Stocks took their cue from the bond market. Growth stocks such as the pandemic favorites fared well as bond yields declined. Value stocks positioned to benefit from the re-opening of the economy rallied as bond yields rose.

For the week ending March 12, the S&P 500 (SPY) rose 2.7%. All of the 11 sectors advanced.

Leaders and laggards for the week ending March 12, 2021.

Consumer discretionary (XLY), real estate (XLRE), and utilities (XLU) led the S&P 500.

Energy (XLE), health care (XLV), and communication services (XLC) lagged the benchmark.

Market breadth was positive. The number of advancing stocks in the S&P 500 beat the number of decliners by a 7-to-1 ratio.

Communication services, industrial, and consumer discretionary companies accounted for seven of the S&P 500’s top 10 winners. Members of the consumer staples and information technology sectors rounded out the top 10.

1. Communication Services

Broadcaster shares were in the limelight for a second straight week. ViacomCBS (VIAC) shares rose 28% to claim the top spot among the S&P 500’s winners for the week. Discovery (DISCA) shares were up 13%.

ViacomCBS said Oprah Winfrey’s interview with Prince Harry and Meghan Markle drew 17 million viewers. Short covering also supported the rally in ViacomCBS shares with 19% of its shares sold short.

2. Industrials

Airline stocks were the bright spot among industrials. Shares of Boeing (BA) surged 21% after the aircraft manufacturer confirmed investment firm 777 Partners will buy 24 of its 737 MAX jets. Boeing was also reported to be working on a deal with Southwest Airlines for several dozens of the 737 MAX.

American Airlines (AAL) and United Airlines (UAL) shares were up 14% and 11%, respectively on optimism of vaccine rollouts leading to an increase in travel. Airlines are also set to receive $14 billion in aid from the American Rescue Plan Act of 2021.

3. Consumer Discretionary

Shares of electric car maker Tesla (TSLA) rebounded 16% from recent losses. The shares lost close to 38% from February 3 to March 5 as rising bond yields lowered the present value of the company’s far-out profits. ‘Dip’ buyers got in as bond yields trended lower last week.

Shares of apparel store Gap (GPS) added 13% to their previous week’s gains. They rallied as part of the retail group on expectations Americans would spend part of the $1,400 stimulus payment in retail stores. In the prior week, Gap topped analysts’ quarterly EPS forecasts by 55% and projected fiscal 2021 sales to rise mid-to-high teens.

Other Top 10 Winners

The S&P 500’s top 10 winners for the week included:

• Solar energy company Enphase Energy (ENPH) 15%
• Drug retailer Walgreens Boots Alliance (WBA) 13%
• IT security and services provider Fortinet (FTNT) 12%

Top ETFs for the week

The following ETFs were among the biggest winners last week:

• Amplify Transformational Data Sharing ETF (BLOK) 17%
• SPDR S&P Retail ETF (XRT) 16%
• Invesco WilderHill Clean Energy ETF (PBW) 15%
• ETFMG Alternative Harvest ETF (MJ) 13%
• iShares Micro-Cap ETF (IWC) 11%

Looking ahead to the week of March 15

The rollout of vaccines and the passage of the American Rescue Plan Act of 2021 have kept the attention of U. S. financial markets on inflation and bond yields. This focus will continue next week with inputs from the Federal Reserve Open Market Committee’s interest rate policy meeting. Meanwhile, some countries in Europe and Asia are battling a resurgence in COVID-19 cases. Growth stocks may lead value stocks this week if the Fed calms interest rate fears and restrictive measures are reintroduced abroad to stem the spread of COVID-19.

* The yield on the 10-year Treasury bond has surged by nearly 0.5% in the past four weeks to 1.64%. The Federal Reserve Open Market Committee meets to discuss U. S. interest policy on March 16 and 17. Investors are eagerly looking to what the Fed has to say on inflation and interest rates. Demand for 20-year notes auctioned by the U. S. Treasury and February retail sales data are also likely to have a bearing on bond yields this week.

* The Federal Reserve has allowed banks to hold Treasury bonds without counting them against the bank’s leverage ratio to provide more flexibility to banks and support the economic recovery since the pandemic. This program is set to end on March 31. It remains to be seen if the Fed will share its thoughts on continuing this program. Bank stocks are likely to react negatively if the Fed decides to pull the plug.

* Over the past four weeks, Germany, India, and Italy have seen a resurgence in the number of daily new COVID-19 cases. Italy is considering a lockdown for Easter while Germany is concerned about a ‘third COVID-19 wave’. Investors will look to earnings from transportation giant FedEx (FDX) and apparel leader Nike (NKE) to get a sense of the global economy.

* Growth stocks may hold the advantage over value stocks this week if the Fed calms worries of spiraling interest rates and restrictive measures are reintroduced abroad to stem the spread of COVID-19.
 

Stay on top of the stock market with ‘Looking Back, Looking Forward’

Sign up free to receive Looking Back, Looking Forward in your Inbox.
 

Learn more:

How AlphaProfit's investment strategy minimizes your risk
How AlphaProfit keeps your fees and expenses low
Performance of model portfolios & recommendations in AlphaProfit's Premium Service investment newsletter
AlphaProfit's free and premium investment newsletters

Bond yields rose in response to comments from Federal Reserve as well as the February jobs report. The stock market struggled with the rising bond yields throughout the week. The rotation from growth to value continued, investors bought stocks of cyclical companies likely to benefit the most from a post-pandemic economic recovery, while selling the pandemic winners.

Bond yields rose in response to comments from Federal Reserve Chair Powell as well as the February jobs report. Starting the week at 1.46%, the yield on the 10-year Treasury bond rose as high as 1.63% before pulling back to close at 1.55%.

Speaking at the Wall Street Journal jobs summit, Powell said the economic reopening could ‘create some upward pressure on prices,’ and acknowledged the recent rise in interest rates. He added that the pickup in inflation is likely to be transitory and the central bank would be patient before changing interest rates or its bond purchase policy.

The lack of specific actions or plans disappointed some investors who expected the Fed to step up purchases of long-term bonds to lower long-term interest rates. The bond market interpreted Powell’s comments as a signal that yields can rise further.

The Labor Department reported the U. S. economy created 379,000 new jobs in February. The number of jobs created was nearly double economists’ forecast and marked the biggest increase in four months. The yield on the 10-year Treasury bond spiked to 1.63% before strong buying materialized to help the yield close the week at 1.55%.

The stock market wrestled with rising bond yields throughout the week. Investors bought cyclical or value stocks that benefit from the reopening of the economy and improving economic growth. Investors sold secular growth stocks and ‘story stocks’ with the promise of ‘far-off’ profits.

The Nasdaq Composite index which is heavily weighted towards the latter group ended 2.1% lower for the week, recording its third straight weekly decline. Providing hope for a near-term rebound in growth stocks, this benchmark reversed an intraday loss of 2.6% on Friday to end the day with a 1.6% gain.

For the week ending March 5, the S&P 500 (SPY) rose 0.9%. Eight of the 11 sectors gained.

Leaders and laggards for the week ending March 05, 2021.

Energy (XLE), financials (XLF), and industrials (XLB) led the S&P 500.

Consumer discretionary (XLY), real estate (XLRE), and information technology (XLK) lagged the benchmark.

Market breadth was positive. The number of advancing stocks in the S&P 500 beat the number of decliners by a 5-to-2 ratio.

Communication services and energy companies accounted for nine of the S&P 500’s top 10 winners. One member from the materials sector rounded out the top 10.

1. Communication Services

Broadcaster shares were in the limelight on analyst upgrades and excitement over streaming services. Fox Corp. (FOXA) shares surged 24% to claim the top spot among the S&P 500’s winners for the week. Bank of America raised its share price target for Fox citing underappreciated assets such as online betting. The Financial Times stirred speculation of Fox examining transaction options as the company’s Executive Chairman Rupert Murdoch turns 90.

Discovery (DISCA) shares were up 21% after the owner of niche channels such as Animal Planet, HGTV, and Travel Channel announced its Discovery+ platform now serves 12 million users.

ViacomCBS (VIAC) shares rose 15% after the entertainment content giant launched its streaming service Paramount+, offering content from Nickelodeon and MTV along with sports and news.

2. Energy

Oil and gas producers showed strong gains after the price of oil jumped 7.5% last week to approach a two-year high. Oil prices shot up after OPEC and Russia rolled over their current production cuts into next month. While oil traders expected OPEC+ to increase production by 1.5 million barrels a day, the cartel agreed to hold April output steady at 7.2 million barrels a day after Saudi Arabia extended its 1 million barrel a day voluntary production cut.

Shares of Apache (APA), Devon Energy (DVN), Diamondback Energy (FANG), EOG Resources (EOG), Marathon Oil (MRO), and Occidental Petroleum (OXY) rose 16-23%, each to make it to the list of top 10 winners.

3. Materials

Shares of paper and packaging solutions provider WestRock (WRK) rose 16% after the company announced a succession plan for its Chief Executive.

Top ETFs for the week

The following ETFs were among the biggest winners last week:

• SPDR S&P Oil & Gas Exploration & Production ETF (XOP) 12%
• Alerian MLP ETF (AMLP) 11%
• VanEck Vectors Oil Services ETF (OIH) 11%
• Fidelity MSCI Energy Index ETF (FENY) 10%
• Vanguard Energy Index Fund ETF (VDE) 10%

Looking ahead to the week of March 08

The Senate passed a $1.9 trillion coronavirus relief package on Saturday, March 6. The plan was approved by a 50-49 vote as Republicans questioned the need for another package. Investors have plenty to chew on interest rates, inflation, and stimulus this week. The expectation of a near-term bottom in growth stocks will also be tested.

* Interest rates will be in focus as the U.S. Treasury is set to auction $120 billion in Treasury securities this week. This auction follows a poor one in February for 7-year Treasury notes that sent interest rates higher. The upcoming auction includes $38 billion in 10-year and $24 billion in 30-year securities along with $58 billion in 3-year notes.

* Wall Street will get a read on inflation in consumer as well as producer prices this week. Economists expect consumer prices to show a 1.4% rise year-over-year.

* The Democratic-held House will seek to pass the bill this week and send it to President Biden for his approval before unemployment aid programs end on March 14. Some weeks ago, investors were cheering the stimulus bill. With inflation concerns rising, the reaction to the stimulus bill cannot be taken for granted. Inflation data and interest rate trends may well determine how stocks react to stimulus.

* Collectively, interest rates, inflation, and stimulus are likely to test the new-found expectation of a near-term bottom in growth stocks.
 

Stay on top of the stock market with ‘Looking Back, Looking Forward’

Sign up free to receive Looking Back, Looking Forward in your Inbox.
 

Learn more:

How AlphaProfit's investment strategy minimizes your risk
How AlphaProfit keeps your fees and expenses low
Performance of model portfolios & recommendations in AlphaProfit's Premium Service investment newsletter
AlphaProfit's free and premium investment newsletters

Stocks reversed course after setting new records as interest rates rose. Data suggested some improvement in the economy amidst progress in COVID vaccination efforts and a drop in COVID case count. Investors rotated out of pandemic plays to reflation plays.

U.S. stock indexes surged to new highs at the beginning of the week on strong earnings, progress in vaccination rollouts, and hopes of the $1.9 trillion federal coronavirus relief package. The rally, however, stalled as economic data stoked inflation concerns and interest rates rose.

In economic data, retail sales surged an unexpectedly high 5.3% in January. IHS Markit’s flash reading of its U. S. purchasing managers index rose to 58.8 in February, the highest in almost six years. As economists upped their first-quarter GDP growth forecasts, the yield on the 10-year Treasury bond rose 0.145% for the week to end at 1.339%.

Treasury Secretary Yellen cited pain from the pandemic to support the case for an additional $1.9 trillion in stimulus despite some improvement in the economy.

Stocks in economically sensitive industries such as banking, energy, materials, and transportation rose from the ‘reflation trade’. Meanwhile, stay-at-home winners or pandemic plays such as large-cap growth stocks lost ground.

For the week ending February 19, the S&P 500 (SPY) fell 0.7%.

Seven of the 11 sectors declined.

Leaders and laggards for the week ending February 19, 2021.

Energy (XLE), financials (XLF), and materials (XLB) bucked the S&P 500.

Health care (XLV), utilities (XLU), and information technology (XLK) lost more than the benchmark.

Market breadth was however positive. The number of advancing stocks in the S&P 500 beat the number of decliners by an 11-to-10 ratio.

Consumer discretionary companies accounted for three of the S&P 500’s top 10 winners. Materials, energy, financial, real estate, and communication services companies were also among the other top 10 winners.

1. Materials

Shares of Freeport-McMoRan (FCX) surged 21% to claim the top spot among the S&P 500’s winners for the week. The copper producer’s shares followed the rise in the red metal’s price to its highest level since late 2011. Rising expectations of an infrastructure spending bill boosted the price of copper.

2. Consumer discretionary

Shares cruise operators were strong on optimism over the effectiveness of COVID-19 vaccines. Encouraging comments from Carnival Corp. and its successful close of $3.5 billion in financing added to bullishness. Carnival CEO Donald said he expects “most, if not all” of his company’s fleet will be in operation by the end of 2021. Shares of Carnival (CCL), Royal Caribbean (RCL), and Norwegian Cruise Line (NCLH) shot up 19%, 16%, and 13%, respectively.

3. Energy

Severe winter weather and analyst upgrades helped shares of oil refiners to double-digit gains. Prices for refined fuels spiked as cold weather hampered oil & gas production in Texas. Credit Suisse raised its share price targets for HollyFrontier (HFC) and Valero Energy (VLO), sending their shares higher by 17% and 11%, respectively.

Other Top 10 Winners

The S&P 500’s top 10 winners for the week included:

• Major bank Wells Fargo (WFC) 16%
• Hotel REIT Host Hotels & Resorts (HST) 15%
• Entertainment provider Discovery (DISCA) 12%
• Financial services provider Charles Schwab (SCHW) 11%

Top ETFs for the week

The following ETFs were among the biggest winners last week:

• Global X Copper Miners ETF (COPX) 15%
• Amplify Transformational Data Sharing ETF (BLOK) 13%
• iShares MSCI Global Metals & Mining Producers ETF (PICK) 7%
• U.S. Global Jets ETF (JETS) 5%
• Invesco KBW Bank ETF (KBWB) 5%

Looking ahead to the week of February 22

Investors’ attention will be on Powell’s testimony, stimulus, and earnings this week. Stocks appear extended from sentiment, technical, and valuation perspectives and may be due for further consolidation.

* Federal Reserve Chairman Powell delivers his semi-annual testimony on the economy before the Senate Banking Committee and the House Financial Services Committee. Economists await Powell’s current view on the economy and inflation, particularly in light of the improvement in economic data and the sharp rise in 10-yr Treasury bond yield. Towards the end of the week, durable goods orders and the personal consumption expenditure price index should provide economists data on the economy and inflation.

* The Democrats have drafted a 591-page coronavirus relief plan, in line with President Biden’s $.19 trillion stimulus proposal. This bill is likely to come before the House of Representatives this week. Speaker Pelosi has said the House will try to pass the coronavirus relief plan before the end of February. The plan is likely to face hurdles in the Senate, where Democrats cannot afford to have any opposition from their party.

* The fourth-quarter earnings reporting season is tapering. Retailers and selected technology companies, that have benefited from the pandemic, will be in focus this week. Home Depot (HD), Lowe’s (LOW), and Etsy (ETSY) are among the retailers reporting. Investors will get insights into the technology space from earnings reports of semiconductor chipmaker NVIDIA (NVDA), software companies salesforce.com (CRM) & Intuit (INTU), and payments company Square (SQ).
 

Stay on top of the stock market with ‘Looking Back, Looking Forward’

Sign up free to receive Looking Back, Looking Forward in your Inbox.
 

Learn more:

How AlphaProfit's investment strategy minimizes your risk
How AlphaProfit keeps your fees and expenses low
Performance of model portfolios & recommendations in AlphaProfit's Premium Service investment newsletter
AlphaProfit's free and premium investment newsletters

The S&P 500 closed last week at a record high. Investors were encouraged by the prospect of additional Congressional aid. S&P 500 companies stayed on track towards posting their first quarter of EPS growth after a gap of three quarters. The COVID vaccine administration program continues to make progress.

The S&P 500 closed the week at an all-time high, its tenth record close for 2021. The rally continued as investors rotated into cyclical and value stocks, expecting both economic growth and inflation to accelerate.

Lawmakers in Washington appeared to move closer to another economic relief bill. A House committee approved half of Biden’s relief plan, advancing $1,400 payments to millions of Americans. President Biden and Treasury Secretary Yellen met with CEOs of JPMorgan, Walmart, and Gap to discuss additional economic relief.

According to FactSet, S&P 500 companies are on track to post at least 2.9% growth in fourth-quarter EPS from the year-ago period. This marks the first positive year-over-year EPS comparison after the first quarter of 2020. It also sharply contrasts with analysts’ December 31, 2020 forecast for fourth-quarter EPS to contract 9.3%.

In COVID vaccine deployment, the U. S. is on track to exceed Biden’s goal of administering 100 million doses in his first 100 days in office. According to the Centers for Disease Control and Prevention, nearly 34.7 million Americans have received at least their first vaccine dose. Biden has said the U. S. will have an adequate supply of vaccines for 300 million Americans by end of July.

For the week ending February 12, the S&P 500 (SPY) rose 1.3%.

Eight of the 11 sectors gained.
 

Leaders and laggards for the week ending February 12, 2021.

Energy (XLE), information technology (XLK), and communication services (XLC) led the S&P 500.

Utilities (XLU), consumer discretionary (XLY), and consumer staples (XLP) declined.

Market breadth was strong. The number of advancing stocks in the S&P 500 beat the number of decliners by a 7-to-3 ratio.

Information technology companies accounted for four of the S&P 500’s top 10 winners. Communication services, consumer discretionary, health care, energy, and real estate companies were also among the other top 10 winners.

1. Communication Services

Shares of Twitter (TWTR) surged 27% to claim the top spot among the S&P 500’s winners for the week. The social media company posted strong fourth-quarter results with users, sales, and EPS rising 26%, 29%, and 23%, respectively. Twitter’s first-quarter sales guidance topped analysts’ forecast.

Live Nation (LYV) shares rose 13% after Berenberg raised its share price target by 28% to $88 a share. Berenberg expects the entertainment company to benefit from pent-up demand for live events.

2. Health Care

Illumina (ILMN) shares jumped 18% to claim the second spot among the S&P 500’s winners for the week. The gene sequencing firm beat analysts’ fourth-quarter sales and EPS forecasts by 6% and 11%, respectively. Illumina saw record orders including COVID-19 sequencing and forecasted 2021 revenue growth to exceed 17%.

3. Information Technology

Shares of Zebra Technologies (ZBRA) gained 17% after the beat analysts’ quarterly sales & EPS sales forecasts. The bar code scanner maker forecasted double-digit growth in sales for the first quarter and all of 2021.

Semiconductor equipment makers were notably strong. Applied Materials (AMAT), KLA Corp. (KLAC), and Lam Research (LRCX) gained 15-16% each. Automakers and consumer electronics companies have reported the availability of semiconductor chips to be in short supply. This shortage implies strong demand and pricing power semiconductor chips.

Other Top 10 Winners

The S&P 500’s top 10 winners for the week included:

• Apparel maker Hanesbrands (HBI) 17%
• Oil & gas producer Marathon Oil (MRO) 13%
• Shopping center REIT Simon Property Group (SPG) 13%

Top ETFs for the week

The following ETFs were among the biggest winners last week:

• Amplify Transformational Data Sharing ETF (BLOK) 24%
• Aberdeen Standard Physical Platinum Shares ETF (PPLT) 11%
• VanEck Vectors Rare Earth/Strategic Metals ETF (REMX) 11%
• Invesco Dynamic Semiconductors ETF (PSI) 11%
• Global X Uranium ETF (URA) 9%

Looking ahead to the week of February 15

Trading this week is shortened by the observance of the President’s Day holiday on Monday, February 15. Investors’ attention will be on stimulus, inflation, and earnings this week. Stocks appear extended from sentiment, technical, and valuation perspectives and may be due for some consolidation.

* Investors will focus on stimulus bill-related developments to get a sense of the final amount approved. The opposition to President Biden’s $1.9 trillion plan has been less-than-expected. The bill is expected to come before Congress during the week of February 22 and could become law by the first week of March.

* Wall Street’s focus on inflation and interest rates is rising as the stimulus package becomes larger. Bond yields are trending higher as growth and inflation expectations rise. The 10-year Treasury’s yield closed at 1.21% last week, the highest since March 2020. This week, Wall Street will get a read on producer price inflation. Minutes from the last FOMC meeting should reveal Federal Reserve’s current view on inflation.

* The fourth-quarter earnings reporting season begins to taper. Applied Materials, CVS Health, Deere, and Walmart are among the larger companies reporting this week. Investors will also keep an eye on the House Financial Services Committee’s hearing on recent trading activity in GameStop and other heavily shorted stocks. The economic calendar is filled with data on the state of the housing industry.
 

Stay on top of the stock market with ‘Looking Back, Looking Forward’

Sign up free to receive Looking Back, Looking Forward in your Inbox.
 

Learn more:

How AlphaProfit's investment strategy minimizes your risk
How AlphaProfit keeps your fees and expenses low
Performance of model portfolios & recommendations in AlphaProfit's Premium Service investment newsletter
AlphaProfit's free and premium investment newsletters

The S&P 500 ended the week at a new closing high. S&P 500 members are on their way to show year-over-year EPS growth after a gap of three quarters. President Biden and the Democrats fast-tracked the $1.9 trillion relief plan without Republican support. Prospects of this stimulus helped investors to take a subpar January jobs report in stride. Vaccine administration has picked up.

Fears of speculative excesses triggered last week by Reddit group-led squeeze of the most shorted stocks like GameStop (GME) and AMC Entertainment (AMC) vanished quickly as such stocks crashed.

Meanwhile, the parade of impressive fourth-quarter earnings reports continued. With S&P 500 members beating analysts’ forecasts by 15% on average, the benchmark’s aggregate earnings are on track to grow year-over-year for the first time since the fourth quarter of 2019.

By a 51-to-50 vote, the Senate approved a budget resolution that would allow Democrats to fast track President Biden’s $1.9 trillion coronavirus relief plan without Republican support. The package includes $1,400 stimulus checks, a supplemental jobless benefit, and COVID-19 vaccine & testing funds.

Investors looked past a lackluster January jobs report, believing Federal stimulus will continue to heal the economy. The Labor Department reported the U. S. economy added just 49,000 jobs. The unemployment rate fell to 6.3% from 6.7% as millions, unable to find work, dropped out of the labor force. Nearly 10 million jobs that vanished in the early stages of the pandemic have not returned.

Vaccine administration gained momentum last week. The cumulative number of COVID-19 vaccination doses administered rose by nearly 9 million to 36.8 million. Concurrently, the nationwide total of COVID-19 hospitalizations fell, ending the week at 86,300 from 101,000 the week before.

For the week ending February 5, the S&P 500 (SPY) rose 4.8%.

All of the 11 sectors gained.
 

Leaders and laggards for the week ending February 05, 2021.

Energy (XLE), communication services (XLC), and financials (XLF) led the S&P 500.

Health care (XLV), utilities (XLU), and consumer staples (XLP) lagged the benchmark.

Market breadth was strong. The number of advancing stocks in the S&P 500 beat the number of decliners by a 15-to-2 ratio.

Consumer discretionary companies accounted for eight of the S&P 500’s top 10 winners. Health care and materials companies were among the other top 10 winners. Retailers and resorts & casinos in the consumer discretionary sector were well represented.

1A. Consumer Discretionary – Retailers

Shares of L Brands (LB) surged 21% to claim the top spot among the S&P 500’s winners for the week. The retailer raised its mid-point of its fiscal fourth-quarter EPS guidance by 8%. The operator of Bath & Body Works and Victoria’s Secret stores firmed its plan to split-off its Victoria’s Secret line by August.

Tapestry (TPR) shares jumped 19% after the owner of Coach and Kate Spade brands topped analysts’ quarterly sales and EPS forecasts. Tapestry’s e-commerce sales grew triple-digits year-over-year to account for one-third of global sales.

1B. Consumer Discretionary – Resorts & Casinos

As vaccines rolled out, investors gravitated towards resort & casino stocks on optimism over profits and margins surging later this year. Penn National Gaming’s (PENN) strong start of its online gambling operations added to the bullishness. Worse-than-expected quarterly results from Wynn Resorts (WYNN) did not detract. MGM Resorts (MGM), Wynn Resorts (WYNN), and Las Vegas Sands (LVS) were up 20%, 18%, and 16%, respectively.

2. Health care

Align Technology (ALGN) shares soared 18% after the maker of Invisalign teeth straighteners beat analysts’ fourth-quarter sales and EPS forecasts. Sales surged 28% year-over-year as adults joined teens in getting their teeth straightened.

3. Materials

Shares of copper producer Freeport-McMoRan (FCX) rose 18% after the copper producer reinstated its dividend after a 12-month gap. Freeport plans to pay $0.30 a year in dividends, up from $0.20 it paid before suspending them.

Top ETFs for the week

The following ETFs were among the biggest winners last week:

• ETFMG Alternative Harvest ETF (MJ) 23%
• The 3D Printing ETF (PRNT) 15%
• Amplify Transformational Data Sharing ETF (BLOK) 15%
• Global X Uranium ETF (URA) 12%
• Invesco Dynamic Software ETF (PSJ) 12%

Looking ahead to the week of February 8

Stimulus, earnings, inflation data, and the impeachment trial of former President Trump will be in focus this week. Small-cap stocks have been overbought for some time. Unforeseen delays in stimulus or reversal in COVID-19 trends can potentially be a catalyst that can trigger a pullback.

* Investors will keenly follow the progress of the $1.9 trillion stimulus package Democrats are fast-tracking to Congress.

* The fourth-quarter earnings reporting season continues. Nearly 80 S&P 500 companies report this week. Cisco Systems (CSCO) from the technology sector, consumer staples heavyweights Coca-Cola (KO) & Pepsi (PEP), and Disney (DIS) from the communication services sector are among those reporting.

* In economic data, the Labor Department reports on consumer price index inflation. Investors will also be attentive to Federal Reserve chairman Powell’s comments to the Economics Club of New York.

* Wall Street will keep an eye on the impeachment trial of former President Trump scheduled to start in the Senate on February 9.
 

Stay on top of the stock market with ‘Looking Back, Looking Forward’

Sign up free to receive Looking Back, Looking Forward in your Inbox.
 

Learn more:

How AlphaProfit's investment strategy minimizes your risk
How AlphaProfit keeps your fees and expenses low
Performance of model portfolios & recommendations in AlphaProfit's Premium Service investment newsletter
AlphaProfit's free and premium investment newsletters

Biden signed a host of executive actions and released his pandemic action plan after becoming the 46th U. S. President. Investors lost their appetite for cyclical stocks after some Democrats and Republicans opposed Biden’s $1.9 trillion stimulus proposal. U. S. stocks continued their rally as investors returned to the mega-cap communication services and technology stocks.

Biden signed several executive orders on issues ranging from COVID-19 and the economy to climate change shortly after becoming the 46th President. He also released his plan to fight the pandemic. The pandemic plan includes provisions to speed up the rollout of vaccines and the production of protective equipment.

Investors, however, lost their appetite for cyclical stocks that stand to benefit from faster economic growth. Some Democrats and Republicans opposed President Biden’s proposed $1.9 trillion financial aid package, suggesting stimulus passed would be lower and later than expected. European economic data also weighed on stocks. They raised fears of another recession as economies in the continent bore the brunt of lockdown measures to combat COVID-19.

Investors replaced their appetite for cyclical stocks with a taste for their pandemic favorites or mega-cap growth stocks. The gains in mega-cap growth stocks helped U. S. stocks in total to rally.

For the week ending January 22, the S&P 500 (SPY) rose 1.9%.

Five of the 11 sectors gained.

Leaders and laggards for the week ending January 22, 2021.

Communication services (XLC), information technology (XLK), and consumer discretionary (XLY) led the S&P 500.

Financials (XLF), energy (XLE), and materials (XLB) lost ground, lagging the benchmark.

Six of the S&P 500’s top 10 winners were consumer discretionary sector members. The winner list also included companies from the communication services, industrial, and healthcare sectors.

1. Consumer Discretionary

Homebuilding stocks rallied on industry data bolstering the outlook for homebuilder earnings. Housing starts & building permits rose to their highest since September 2006 and August 2006, respectively, while the supply of existing homes is at an all-time low.

Homebuilder PulteGroup (PHM) led the charge; its shares rose 14%. NVR, Inc. (NVR), Lennar (LEN), and D.R. Horton (DHI) were the other homebuilders featuring in this list with gains of 10-12% each.

Shares of Ford Motor (F) led the auto group with a 17% gain after Deutsche Bank and JPMorgan upgraded them. Shares of auto retailer CarMax (KMX) also cruised to an 11% gain after Northcoast Research upgraded the stock to buy. Auto stocks are rising on expectations of electric vehicles growing their market share from Biden’s clean-energy push.

2. Communication Services

Netflix (NFLX) shares climbed 13%. The internet television network added 8.5 million subscribers in the fourth quarter, beating analysts’ 6.5 million forecast. Netflix also increased its 2021 and 2022 free cash flow forecasts.

Shares of social media giant Facebook (FB) rebounded from their prior week losses with a 9% gain. The shares return to favor on rising earnings expectations and positive comments from BMO Capital Markets ahead of Facebook’s fourth-quarter earnings report on January 27.

3. Other top 10 winners

• Truck maker PACCAR (PCAR) 12%
• Drug maker Eli Lilly (LLY) 8%

Top ETFs for the week

The following ETFs were among the biggest winners last week:

• Invesco Solar ETF (TAN) 13%
• VanEck Vectors Rare Earth/Strategic Metals ETF (REMX) 12%
• KraneShares CSI China Internet ETF (KWEB) 12%
• Invesco WilderHill Clean Energy ETF (PBW) 10%
• iShares U.S. Home Construction ETF (ITB) 9%

Looking ahead to the week of January 25

Investors have plenty to look forward to this week, including fourth-quarter earnings reports, Federal Reserve’s interest rate meeting, and GDP growth data. Investors will also seek clues to the size and timing of the stimulus plan likely to be approved. There is also room for optimism in the fight against COVID-19. Small-cap stocks remain overbought and are vulnerable to a pullback.

* Over 100 S&P 500 members will report their quarterly earnings this week. The reporting companies include Apple (AAPL), Facebook (FB), Johnson & Johnson (JNJ), Mastercard (MA), Microsoft (MSFT), Tesla (TSLA), and Visa (V).

* Johnson and Johnson may release results from the trials of its single-regimen COVID-19 vaccine. Positive trial data can help to boost vaccine supplies soon. Investors will also watch if the January 8 peak in the nationwide count of daily new COVID-19 cases endures.

* The Federal Open Market Committee holds its first interest rate policy meeting in 2021. Economists do not expect the central bank to take any action or make significant changes to its statement after the two-day event.

* In economic data, the Commerce Department provides its first estimate of the fourth quarter U. S. gross domestic product growth. Economists expect the economy to grow by 4.4% from the previous quarter.

* Investors will remain tuned to the size and timing of the stimulus plan likely to be approved. They will be alert to any impact on the progress of Biden’s fiscal stimulus bill from the Senate’s impeachment proceedings against former President Trump.
 

Stay on top of the stock market with ‘Looking Back, Looking Forward’

Sign up free to receive Looking Back, Looking Forward in your Inbox.
 

Learn more:

How AlphaProfit's investment strategy minimizes your risk
How AlphaProfit keeps your fees and expenses low
Performance of model portfolios & recommendations in AlphaProfit's Premium Service investment newsletter
AlphaProfit's free and premium investment newsletters

President-elect Biden provided details of his $1.9 trillion stimulus proposal called the American Rescue Plan. Bond yields continued climbing for a second straight week on expectations of a pickup in growth and inflation. Bank stocks fell after they kicked off the fourth-quarter reporting season with mixed reports.

President-elect Biden provided details of his widely anticipated $1.9 trillion stimulus proposal last week. The American Rescue Plan includes $350 billion in state & local government aid and $70 billion for COVID testing & vaccination programs. The plan also includes $1,400 direct payment to many Americans and additional federal unemployment payments through September. It also extends the Federal moratoriums on evictions & foreclosures through September.

Expectations of growth and inflation have risen after Democrats took control of both the House and the Senate, opening the door for additional fiscal stimulus. Bond yields extended their increase into the second trading week of 2021, rising to their highest since March 2020. After starting the year at 0.91%, the 10-year Treasury bond yield rose as high as 1.19% last week before pulling back to close at 1.08%.

Banks kicked off the fourth-quarter earnings reporting season. JPMorgan Chase (JPM) reported revenue and earnings above analysts’ forecast. Earnings at Citigroup (C) and Wells Fargo (WFC) topped analysts’ estimates. Their revenues, however, fell short of expectations. Bank stocks sold off en masse after these earnings reports. Investors wanted more from banks after their shares had risen 50% since September 30, 2020.

For the week ending January 15, the S&P 500 (SPY) fell 1.5%.

Four of the 11 sectors gained.

Leaders and laggards for the week ending January 15, 2021.

Energy (XLE), real estate (XLRE), and utilities (XLU) gained to lead the S&P 500.

Communication services (XLC), information technology (XLK), and consumer staples (XLP) lagged the benchmark.

The number of declining stocks in the S&P 500 edged out the number of advancers by an 8-to-7 ratio.

The S&P 500’s top 10 winners included companies from the consumer discretionary and energy sectors.

1. Consumer discretionary

Etsy (ETSY) shares surged 16%, claiming the top spot among the S&P 500 winners for the week. Jefferies raised its price target for the online arts & crafts retailer by 22% to $205 a share. The broker expects Etsy’s sales to ‘defy gravity’ from a doubling in November & December website traffic and gains in greeting card market share.

General Motors (GM) shares also rose 16%, trailing Etsy just fractionally. GM unveiled a new electric commercial-vehicle brand BrightDrop, targeting the last-mile delivery and logistics market. The new brand’s EV 600 van is expected to be available in late 2021. Nomura and Argus upgraded their ratings on GM stock.

2. Energy

The bullish backdrop for natural gas and oil supported energy stocks. Continued strength in demand for U. S. liquified natural gas (LNG) from abroad, hopes of vaccines and stimulus driving oil demand, and a weaker U. S. dollar demand supported the bullish sentiment.

The five energy companies from the S&P 500 in the top 10 winners were oil producers Occidental Petroleum (OXY) and Marathon Oil (MRO), oil refiner HollyFrontier (HFC), pipeline ONEOK (OKE), and natural gas producer Cabot Oil & Gas (COG). Their gains ranged between 9% and 12%.

3. Other top 10 winners

The top 10 winners included one company each, from the healthcare, consumer discretionary, and information technology sectors.

Eli Lilly (LLY) shares rose 15%. The drug maker’s phase 2 trial of Alzheimer’s disease treatment donanemab, slowed the decline in cognitive functions by a statistically significant 32%.

Shares of ViacomCBS (VIAC) were up 13% after the entertainment giant’s chief financial officer made optimistic comments on the upcoming launch of its Paramount+streaming service.

Intel (INTC) shares were up 11% for the week after the semiconductor chipmaker announced former Intel veteran Gelsinger would become its CEO in February.

Top ETFs for the week

The following ETFs were among the biggest winners last week:

• Global X Cannabis ETF (POTX) +27%
• ETFMG Alternative Harvest ETF (MJ) +18%
• Alerian MLP ETF (AMLP) +6%
• SPDR S&P Oil & Gas Exploration & Production ETF (XOP) +6%
• SPDR S&P Retail ETF (XRT) +6%

Looking ahead to the week of January 19

The observance of the Martin Luther King Jr. Day holiday on Monday shortens the trading week. Biden’s inauguration and earnings reports are in focus. These earnings reports should shed light on the response of stock prices to earnings during this reporting season.

* President-elect Biden will be inaugurated as the 46th U. S. president on Wednesday. The near-term concern is on the potential for protests in Washington or at state capitals. More importantly, investors have their attention on two items: the effectiveness of Biden’s COVID19 plan and the final size of the stimulus package approved by Congress. Biden needs the votes of moderate Democrats and Republicans to get the package approved by the Senate. At this point, the compromises required to win their support is unknown.

* Last week, bank stocks sold off after reporting earnings. The earnings reporting season gets into a higher gear this week. Bank of America, Goldman Sachs, Intel, International Business Machines, Morgan Stanley, Netflix, and Procter & Gamble are among the 33 S&P 500 members reporting this week. Investors are watching the response of their stocks to earnings reports. They should provide clues on whether the response bank stocks received last week will become the norm for this reporting season.

* The economic calendar is light. Following the rapid rise in bond yields in 2021, Wall Street is alert to the possibility of rising yields impacting stock prices.
 

Stay on top of the stock market with ‘Looking Back, Looking Forward’

Sign up free to receive Looking Back, Looking Forward in your Inbox.
 

Learn more:

How AlphaProfit's investment strategy minimizes your risk
How AlphaProfit keeps your fees and expenses low
Performance of model portfolios & recommendations in AlphaProfit's Premium Service investment newsletter
AlphaProfit's free and premium investment newsletters

U. S. stocks rose to record highs in the first week of 2021 on expectations of a larger fiscal package and higher infrastructure spending under a Democratic-led U. S. Congress. The December jobs report reflected the impact of a resurgence in COVID19 cases and the return of lockdowns.

U. S. stocks set new records in the first week of 2021. They rallied sharply after the Democrats won both the runoff elections from Georgia for the U. S. Senate.

The result shifted control of the Senate to Democrats, giving Democrats control over both chambers of Congress.

Investors believed the Democrat President-elect Biden would deliver a bigger stimulus package than what would have been possible under a divided Congress. Investors also expected infrastructure spending to rise under the Biden administration.

Both chambers of Congress convened to confirm Biden as the next President but not before a riot at the Capitol delayed the electoral vote count.

COVID19 continued to take a heavy toll on human life last week. The U. S. daily death tally exceeded 4,000 for the first time while the number of daily new cases topped 300,000 for the first time.

Economic data showed the impact of lockdowns. The Labor Department reported the U. S. economy lost 140,000 jobs in December, the first monthly job loss since April. Investors were unfazed, interpreting the data as giving the Biden administration more reason for stimulus.

For the week ending January 8, the S&P 500 (SPY) rose 2.0%.

Eight of the 11 sectors gained.

Leaders and laggards for the week ending January 08, 2021.

Energy (XLE), materials (XLB), and consumer discretionary (XLY) led the S&P 500.

Real estate (XLRE), consumer staples (XLP), and utilities (XLU) lagged the benchmark.

The number of advancing stocks in the S&P 500 beat the number of decliners by a 2-to-1 ratio.

The S&P 500’s top 10 winners included companies from the consumer discretionary, materials, and energy sectors.

1. Consumer discretionary

L Brands (LB) shares rose 26%, claiming the top spot among the S&P 500 winners for the week. The retailer lifted its fourth-quarter earnings guidance by 35% after same-store sales in its Bath & Body Works segment surged 17% during the nine-week holiday period.

The S&P 500 index’s new entrant Tesla (TSLA) soared 25% after analysts at RBC Capital & Evercore ISI upgraded their ratings. The electric car maker became the fifth largest constituent of the S&P 500.

2. Materials

Shares of lithium producer Albemarle (ALB) vaulted 25% after Democrats controlled both chambers of Congress. Lithium demand should increase from the rising use of lithium-ion batteries if the ‘green deal’ materializes as expected by investors.

Copper producer Freeport McMoRan (FCX) and fertilizer producer Mosaic (MOS) saw their shares gain 20% and 17%, respectively. Freeport shares rode the rise in the price of copper. Mosaic shares benefited after Citigroup and JP Morgan upgraded their ratings.

3. Energy

Energy shares got a boost from an 8% price increase in the price of oil. Oil closed at the highest level in nearly a year after Saudi Arabia said it would cut 1 million barrels per day from its February and March production to offset the fall in demand from lockdowns. Hopes of a Democrat-controlled Congress providing additional pandemic aid also lifted oil prices.

Shares of oil services firm TechnipFMC (FTI) rose 24% after the Franco-American resumed its plan to split itself into two, a move delayed since March 2020. Shares of petroleum producers EOG Resources (EOG), Diamondback Energy (FANG), and Apache (APA) rose around 17-18% each.

Top ETFs for the week

The following ETFs were among the biggest winners last week:

• Global X Cannabis ETF (POTX) +23%
• Amplify Transformational Data Sharing ETF (BLOK) +19%
• iShares Global Clean Energy ETF (ICLN) +17%
• ETFMG Alternative Harvest ETF (MJ) +17%
• Invesco Solar ETF (TAN) +16%

Looking ahead to the week of January 11

Stimulus, earnings, and economic data are likely to dominate the headlines this week. With the large-cap S&P 500 and small-cap Russell 2000 indexes up 17% and 36%, respectively, since the end of October 2020, a pullback of sorts is likely not far away. Disappointment in stimulus discussions may be the catalyst.

* Wall Street will focus on the progress of stimulus discussions in Washington before President-elect Biden’s inauguration on January 20. Biden has upped expectations for his administration’s economic package to amount to trillions of dollars. A package including unemployment insurance and rent forbearance is expected on Thursday. Progress towards such a package may not be smooth if Democratic Senators like Manchin oppose bigger direct checks before addressing the pandemic.

* The fourth-quarter earnings reports kick off next week. Banks are in the spotlight, with JPMorgan (JPM), Wells Fargo (WFC), and Citigroup (C) scheduled to report.

* Investors will get a sense of consumer price inflation and December retail sales. Several Federal Reserve officials, including Chairman Powell, are scheduled for a webcast from Princeton University.
 

Stay on top of the stock market with ‘Looking Back, Looking Forward’

Sign up free to receive Looking Back, Looking Forward in your Inbox.
 

Learn more:

How AlphaProfit's investment strategy minimizes your risk
How AlphaProfit keeps your fees and expenses low
Performance of model portfolios & recommendations in AlphaProfit's Premium Service investment newsletter
AlphaProfit's free and premium investment newsletters

Despite being down over 30% at their low for the year, U. S. stocks ended at a record high. Some ETFs, Fidelity funds, and S&P 500 stocks raked in eye-popping gains in this topsy-turvy environment. Here is a list of the best of the best, along with what to look forward in 2021.

The S&P 500 ended 2020 at a record high. The toll of the pandemic on human life continued to increase throughout the year. Corporate earnings contracted sharply. Yet, economic aid packages from Congress, near-zero interest rates, and the development of COVID-19 vaccines at warp speed helped stocks to advance.

Here, we look at what ETFs, Select SPDRs, Fidelity funds, and S&P 500 stocks returned the most in 2020.

Best ETFs of 2020

Cryptocurrency, clean energy, and biotechnology were themes that worked well in the ETF world.

• Grayscale Ethereum Trust (ETHE)       +442%
• Invesco Solar ETF (TAN)       +234%
• Invesco WilderHill Clean Energy ETF (PBW)       +205%
• First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN)       +184%
• ARK Genomic Revolution ETF (ARKG)       +181%

Best Select Sector SPDR ETFs of 2020

Technology and consumer discretionary Select Sector SPDR ETFs took the top positions after mega-cap companies like Apple and Amazon benefited from the pandemic-driven work- and shop-from-home trends.

• Technology Select Sector SPDR (XLK)       +44%
• Consumer Discretionary Select Sector SPDR (XLY)       +30%
• Communication Services Select Sector SPDR (XLC)       +27%
• Materials Select Sector SPDR (XLB)       +21%
• SPDR S&P 500 ETF (SPY)       +18%

Best Fidelity Funds of 2020

Fidelity funds focused on Asia and the information technology sector claimed top honors. Ownership of Tesla shares helped the automotive fund. Fidelity Blue Chip Growth, a diversified large-cap growth fund, benefited from its stakes in FAANG and Tesla.

• Fidelity Emerging Asia Fund (FSEAX)      +73%
• Fidelity Select Technology Portfolio (FSPTX)      +64%
• Fidelity Select Automotive Portfolio (FSAVX)      +62%
• Fidelity Blue Chip Growth Fund (FBGRX)      +62%
• Fidelity China Region Fund (FHKCX)      +48%

Best S&P 500 Stocks of 2020

Tesla shares surged over 700%. The S&P 500 index committee added shares of the electric carmaker to the benchmark on December 21. Shares of online retailer ETSY and digital payment platform PayPal benefited from the ‘stay-at-home’ trend.

• Tesla (TSLA)       +743%
• Etsy (ETSY)       +302%
• NVIDIA Corporation (NVDA)       +122%
• PayPal Holdings (PYPL)       +117%
• L Brands (LB)       +105%

Looking ahead to 2021

Political events and economic data dominate the opening week of the new year.

* Congress convenes a joint session on January 6 to formally count the electoral college votes and confirm the next President. Some drama is likely at this usually low-key event. Supported by Vice President Pence, some Republicans have said they would vote to reject President-elect Biden’s victory.

* The control of the U. S. Senate hinges on the Senate runoff elections in Georgia on January 5. If Democrats win both runoff elections, the U. S. Senate would be evenly split between Democrats & Republicans and give Democratic Vice President-elect Harris the ability to tip the balance towards Democrats with her tie-breaking vote. Investors are comfortable with Republicans retaining control of the Senate and restraining Democrats from hiking tax rates.

* The Labor Department provides the December jobs report on January 8. The economy has lost steam from the reinstatement of restrictions prompted by the rapid increase in COVID19 cases in December. Weekly jobless claims ticked up last month. Economists expect the Labor Department to report about 100,000 job additions in December compared to 245,000 in November.
 

Stay on top of the stock market with ‘Looking Back, Looking Forward’

Sign up free to receive Looking Back, Looking Forward in your Inbox.
 

Learn more:

How AlphaProfit's investment strategy minimizes your risk
How AlphaProfit keeps your fees and expenses low
Performance of model portfolios & recommendations in AlphaProfit's Premium Service investment newsletter
AlphaProfit's free and premium investment newsletters

Hopes of closure on COVID-19 emerged as the U. S. started rolling out the vaccine. Suffering from the virus, however, continued to increase. Republicans and Democrats appeared to move closer to approving new financial aid.

The U. S. began administering the COVID-19 vaccine developed by Pfizer & BioNTech early last week. Boosting vaccine supplies, the U. S. Food and Drug Administration approved Moderna’s vaccine by the end of the week. Moderna’s vaccine is expected to arrive in different states starting Monday.

Meanwhile, the coronavirus continued to take its toll. The 7-day average of daily new cases and the daily deaths in the U. S. remained above 200,000 and 2,500, respectively, through the week.

Economic data disappointed. Weekly jobless claims totaled 885,000 compared to economists’ 808,000 forecast. The decline in November retail sales exceeded expectations. The Federal Reserve promised to continue buying at least $120 billion of bonds each month to keep interest rates low and fight the recession.

Disappointing economic data brought Republicans and Democrats closer to approving new financial aid. Negotiations on the elements of the stimulus package continued through Friday. Congress and President Trump approved a two-day stopgap spending bill to prevent a partial government shutdown.

For the week ending December 18, the S&P 500 (SPY) rose 1.3%.

Ten of the 11 sectors gained.

Leaders and laggards for the week ending December 18, 2020.

Information technology (XLK), consumer discretionary (XLY), and materials (XLB) led the S&P 500.

Energy (XLE), industrials (XLI), and utilities (XLU) lagged the benchmark.

The number of advancing stocks in the S&P 500 trounced the number of decliners by a 5-to-3 ratio.

The S&P 500’s top 10 winners included companies from the health care, information technology, and consumer discretionary sectors.

1. Health Care

Alexion Pharmaceuticals (ALXN) shares rose 30%, claiming the top spot among the S&P 500 winners for the week. The biotech company received a $39 billion buyout offer from European pharma giant AstraZeneca (AZN).

Abiomed (ABMD) shares gained 14% after the medical devices company achieved two milestones in developing small-bore access for the Impella heart pump. Morgan Stanley raised its Abiomed share price target by 10% to $238.

2. Information Technology

Shares of enterprise and government security provider Fortinet (FTNT) rallied 14%. Cyber-security shares shot up after Russian hackers allegedly broke into the computer networks of several federal agencies.

Shares on online payment company PayPal (PYPL) were up 10%. With PayPal now processing bitcoin transactions, its shares took their cue from strength in bitcoin. Analysts at KeyBanc & Stephens raised their PayPal share price targets by 5-10%.

3. Consumer Discretionary

Lennar Corp. (LEN) shares rose 11% after the homebuilder topped analysts’ fiscal fourth-quarter sales and EPS forecasts by 8% and 9%, respectively. Sales, EPS, and new orders for fiscal 2020 were the highest in Lennar’s history.

Chipotle Mexican Grill (CMG) shares gained 9%. Stifel called the restaurant’s unit growth prospects ‘most compelling’ among peers. Applauding Chipotle’s efforts to build sales, Stifel raised its share rating to Buy and upped the price target by $100 to $1,500.

Other Top 10 Winners

The S&P 500’s top 10 winners for the week included:

• Online marketplace Etsy (ETSY) +12%
• Electronic design software supplier Cadence Design Systems (CDNS) +11%
• Drug delivery technology company Catalent (CTLT) +10%

Top ETFs for the week

The following ETFs were among the biggest winners last week:

• Invesco Solar ETF (TAN) +15%
• Amplify Transformational Data Sharing ETF (BLOK) +12%
• iShares Global Clean Energy ETF (ICLN) +10%
• ETFMG Prime Junior Silver Miners ETF (SILJ) +10%
• First Trust NASDAQ Cybersecurity ETF (CIBR) +9%

Looking ahead to 2021

Some profit-taking may be in store with stocks technically overbought heading to the year-end. The decline is likely to be limited unless Congress fails to approve a new stimulus package or COVID-19 vaccines see negative surprises. The outcome of the Georgia Senate elections can move markets in early 2021.

* Congressional lawmakers are still negotiating the new financial aid package. As of Saturday evening, Federal Reserve lending programs are a sticking point. Led by Senator Toomey, the Republican proposal seeks to guarantee that the Federal Reserve cannot renew emergency lending programs for small businesses and state & local governments after January 1. Democrats oppose the provision since it limits the economic tools available to President-elect Biden before he takes office.

* The January 5, 2021 runoff Senate elections in Georgia have the potential to shift the balance of power in the U. S. Congress. Wall Street currently expects Republicans to win one or both of these elections. Republicans will then retain control of the Senate, and Democrats will control the House of Representatives. If Democrats win both runoff elections, each party will have 50 Senate seats. The Democrats will effectively take control of the Senate since Vice President-elect Harris holds the tie-breaking vote. The majority in both chambers of Congress can allow Democrats to implement larger stimulus and raise taxes.

* The economic and earnings calendars are relatively light through January 8, 2021, when the December 2020 job report is due. Meanwhile, weekly jobless claims and housing industry data are likely to garner attention. Micron Technology (MU), Constellation Brands (STZ), Cintas Corp. (CTAS), Walgreens Boots Alliance (WBA), and Paychex (PAYX) are among the S&P 500 members reporting.

Note: Christmas and New Year’s Day holidays shorten the remaining trading weeks in 2020. The stock market closes at 1:00 p.m. Eastern on December 24. The weekly e-letter will return to its regular schedule in 2021.
 

Stay on top of the stock market with ‘Looking Back, Looking Forward’

Sign up free to receive Looking Back, Looking Forward in your Inbox.
 

Learn more:

How AlphaProfit's investment strategy minimizes your risk
How AlphaProfit keeps your fees and expenses low
Performance of model portfolios & recommendations in AlphaProfit's Premium Service investment newsletter
AlphaProfit's free and premium investment newsletters