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November market review: risks are still high

Stocks rallied in the last month of fall because everyone believes the virus vaccine will certainly work. And everything will be as before.

Boeing shares also began to rise on the same hope for a favorable outcome. In the meantime, one of the airliners even received a permit for commercial flights. Life is getting better. The week before Thanksgiving gathered an incredible amount of ticket purchases.

The Dow Jones Industrial Average closed on November 24 for the first time above 30,000 points. It fell nearly 1.4% over the next three days, but its 11.84% monthly rise was the largest since January 1987, when it stood at 13.8%.

The S&P 500 rose to 10.6%. This is the best indicator since the fourth month of the year. In general testing, it is indicated that this is a general result. The NASDAQ index rose by 11.6%.

At the start of the week, stocks were down. This is due to the lack of a strategically thought out plan and clarity.

Yes, the news about the vaccine is quite positive, but still, there are no details.

For example, Brent dropped its positions by almost 1% to $ 48.88 a barrel after rising 26%.

Trump is still fighting for office with Biden, challenging the election results.

The new president has other concerns. So, the economy is trying to survive a new wave of the virus, from the resistance of the Republicans, and so on.

Interest rates will remain low. The Federal Reserve almost guaranteed it.

The yield on 10-year Treasury bonds at 0.84% was down about 1.9% month-over-month and was still down 56% year-over-year. This is good for IPOs, home buying and construction, some startups, and stocks.

Stability is forecast for December.

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It started with a meeting. The participants firmly stated that the vaccine will change the current situation. Biden has indeed stepped forward, but Republicans are convinced that this is not a democracy. The market started to rally: Dow, S&P 500, NASDAQ Composite, Russell 2000, and Dow Jones Transportation Average.

Other indices also showed an incomprehensible increase, although this is not the case if the virus began to go away.

Although the news of vaccine testing is good for this process. For example, Moderna and BioNTech shares rose 126% and 45.5% in November, respectively.

The travel industry was able to breathe a sigh of relief when the news that the pandemic had gone down, but not for long. Due to the rapid spread of the virus around the world, the recession continues.

As you already know, one of the models was confirmed the possibility of commercial flights. The stock of this company rose by 46%. Apple, Microsoft, Amazon, Google, and Tesla are up 11% this fall.

Tesla is up a whopping 46% in 30 days. It turned out that starting from the $ 600 mark and they rose to $ 607.80. Then they fell by 3.1%. But this is irrelevant.

And they still showed their 578% for the year. This is more than all other car manufacturers.

Because of its high market value, Tesla needs to change and expand its index. A wave of trading awaits the manufacturer, you need to be prepared.

And no glitter from now on

At the end of the month, most of the investor money went to big companies like Apple, Microsoft, Netflix and Facebook. For example, the shares of chipmakers and retailers rose 33%, while Target grew 40% annually.

All companies affected by COVID-19, including airlines, metals and energy companies, are making big bets.

For example, US Steel hit a 52-week high on Friday and is up 24% year-over-year. United Airlines Group rose 33% in November. JetBlue Airways’ shares fell 4% after the carrier warned they could fall 70% in the fourth quarter from last year. due to the increase in the number of cases of COVID-19. It is unclear what will happen to them next.

Commodities rallied as they did when West Texas Intermediate stock fell below $ 20 a barrel before the market bottomed.

The pandemic continued to rage and demand oil appears to have increased. More wells are being drilled in the United States. Now there are 241 of them. This is about 64% less than a year ago, but 40% more than 172 in mid-August.

IPO forecasts and approvals

The IPO panics and makes its predictions. New proposals can be much better than old ones, so they are worth paying attention to.

Renaissance Capital data shows that 193 companies went public this year, the most active since 2014.

The most popular and in-demand IPOs of this year:

Snowflake was priced at $ 120 in early fall and is now at $ 325.84. This is 171% higher than the IPO.

Music group Warner started at $ 25 and are now at $ 29.73, up 18.9%.

Supermarket chain Albertson’s Companies, which went public at $ 16 and ended at $ 16.03, has changed little.

SPAC has also been active by selling stakes, with the sponsor buying private businesses, which then go on sale. So now 210 companies have been bought out. If the contract burns out, the money is returned to the depositor.

Among the largest SPACs to date are DraftKings Online Games Company and Acquisition Corp. The shares are up 197% since the start of public trading.

This can add up to any of the ratings you turn to for understanding rates. For example, a long list of forex brokers.

Low interest and the goal of making big profits are the most important reasons for shaping the state of the market as a whole. IPO flow is the largest in the last 20 years. According to various opinions, the companies attracted investments of $ 68.6 billion, which is 57% more than a year ago.

Many investors are anticipating Airbnb’s IPO position. They can jump to $ 30 billion. The company itself claims that its income has jumped and is growing after the first half of the quarantine.

There are biotech companies that are looking to become bidders. For example, Moderna. So far, there are no big hopes for this area, although a worthwhile project can convince everyone. But our example tries to show that this can also be a worthwhile product.

Markets are in good shape now.

To say that stocks were volatile in 2020 is to say nothing. This year, the S&P 500 is up or down more than 10% three times in a month.

The last three months have been pretty favorable. And even the change of the president did not affect.

Interest rates could remain low, so investors should buy before the global economy recovers if coronavirus vaccines are available and effective.

However, keep in mind that there is a high likelihood that the pandemic will worsen before vaccines become widely available, and this could affect stocks. There is also a risk that stock prices will become prohibitively high, especially if megacities such as Apple, Alphabet and Tesla are actively buying them. This was the case a year ago until the market peaked at the end of January 2020.

However, there are probably some concerns about the dollar’s fall. The US dollar index futures fell 2.3% in November and 4.4% year on year. The dollar rallied sharply in March and early April, when the pandemic caused panic in financial markets, but has since fallen by nearly 9%.

It is also worrying that the Biden administration, Senate and House of Representatives will not be able to agree on a stimulus package to support many sectors of the economy affected by the pandemic, especially hotels, restaurants, the tourism industry and commercial real estate. the property. The lack of additional financial assistance to US consumers will also have a significant impact on the retail sector.

All this could force the Federal Reserve to provide additional support to the economy until it becomes clear that the availability of vaccines can lead to economic recovery.