Wall Street on pace for record-breaking November
Markets rallied after news outlets projected Democrat Joe Biden the winner of the Nov. 3 election, with investors largely looking past President Trump’s unfounded claims of voter fraud and refusal to concede. Then came several promising announcements showing the effectiveness of multiple experimental vaccines. The formal launch of the White House transition lifted Wall Street’s optimism further, notching double-digit growth and cementing November’s broad-based rally as one of the best performances in more than 90 years.
The S&P 500 has climbed 11 percent since the end of October, forging a record of growth not seen since 1928. The Dow, which last week surpassed 30,000 for the first time, is on pace for its best month since 1987. Analysts are encouraged by the makeup of the rally, which has broadened beyond the giant technology companies that fueled much of Wall Street’s comeback in the summer months.
“Industrials and value names have started to climb this year as the market strength continued to broaden in the month of November,” said Michael Farr, president of Farr, Miller & Washington.
Other sectors are also driving the gains, as are smaller companies — another upbeat indicator for the country’s economic prospects. The Russell 2000 index, comprising small-cap stocks, has surged more than 20 percent this month, which would mark the biggest monthly gain since the index began tracking its companies in 1984.
Following Election Day and the breakthrough vaccine developments, Wall Street also cheered Biden’s early Cabinet picks. Perhaps chief among those was the selection of Janet L. Yellen to head the Treasury Department. Yellen led the Federal Reserve from 2014 to 2018, overlapping the Obama and Trump administrations. And during the pandemic, she has emerged as a leading voice urging robust spending from Congress to avoid further economic damage.
The transition was greenlighted last Monday, nearly three weeks after the election, allowing Biden’s developing administration to access public funds and tap federal agencies. The crucial bureaucratic step served as another stabilizing signal to investors even as Trump refuses to concede the race and launched a rush of lawsuits attempting to overturn the results in key states.
“November’s rally built on three very promising vaccines for COVID 19, greater post-election certainty that includes market friendly cabinet nominations, and a forthcoming peaceful transition of power,” Farr said.
