Equity markets, as measured by the S&P 500, closed the final week of 2020 up 1.35% with Utilities and Consumer Discretionary sectors leading the way. All told 2020 was a remarkably resilient year for equities as the S&P 500 closed 2020 up 18.39%. In February and March equities were rocked by the global COVID-19 pandemic which caused the quickest peak to trough recession in market history in a mere 33 days. However, the quickest full retracement in market history ensued lasting only 148 days underpinning equity resilience during this pandemic year. Tuesday there are two U.S. Senate runoffs to determine partisan control of the U.S. Government. If the Democrats win both that would bring the senate to a 50-50 tie which would then have a tie broken by the Vice President-Elect Kamala Harris after her January 20th inauguration. If the Republicans win one of the two Georgia races, they would retain control of the Senate for the next two years dealing a big blow to Democrats hoping to pass progressive initiatives. Currently most polls have a statistical tie (within the margin of error) so it is still up in the air.
Treasury yields remained mostly flat over the course of the week as uncertainty remained around the size and scope of the stimulus package. On Sunday, President Trump signed the $900 billion pandemic relief package and a $1.4 billion government funding bill. On Monday, the House passed a bill that would increase the stimulus payments to individuals from $600 to $2000. However, that bill stalled in the Senate on Tuesday and talks will continue in the new year.
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