Weekly Economic Update: Stocks Hit Record High; Market Reactions on Stimulus Checks and Vaccine
Presented by Nicholas Wealth Management
January 4, 2020
Weekly Market Update
In this week’s recap: Happy New Year! Stocks hit record highs and have varied reactions on stimulus checks and another potential vaccine.
The Week on Wall Street
Stocks moved higher during a holiday-shortened week of trading, capping off a turbulent, but otherwise strong year for equity investors.
The Dow Jones Industrial Average gained 1.35%, while the Standard & Poor’s 500 increased by 1.43%. The Nasdaq Composite index, which led all year, added 0.65%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 2.02%.1,2,3
Stocks End 2020 on a Positive Note
Companies raised over $167 billion in initial public offerings this year, blowing past the record of $107.9 billion set in 1999.5
This explosion in capital raising was one of the biggest surprises this year, especially considering the flight to safety in March and April. The introduction of unprecedented monetary easing played a critical role helping this flood of new issuance.
Also playing a role was the popularity of SPACs (Special Purpose Acquisition Corporations). A SPAC is a company that is formed to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company. SPACs accounted for almost half of the fundraising in the IPO market.6
The Unexpected IPO Boom
Companies raised over $167 billion in initial public offerings this year, blowing past the record of $107.9 billion set in 1999.5
This explosion in capital raising was one of the biggest surprises this year, especially considering the flight to safety in March and April. The introduction of unprecedented monetary easing played a critical role helping this flood of new issuance.
Also playing a role was the popularity of SPACs (Special Purpose Acquisition Corporations). A SPAC is a company that is formed to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company. SPACs accounted for almost half of the fundraising in the IPO market.6
Final Thoughts
We join all Americans in happily drawing the curtain on 2020. Though it was a challenging and tragic year for so many, there are good reasons to believe that 2021 will be a year of progress in returning to our pre-pandemic normal. We wish you and your family a healthy and happy new year!
Tip of the Week
If you’re thinking about selling a business, consider contacting a business broker, one that represents companies similar to yours. It may make finding an appropriate buyer easier.
Media
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CITATIONS:
1. The Wall Street Journal, December 31, 2020
2. The Wall Street Journal, December 31, 2020
3. The Wall Street Journal, December 31, 2020
4. FoxBusiness.com, December 29, 2020
5. The Wall Street Journal, December 30, 2020
6. The Wall Street Journal, December 30, 2020
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