U.S. stocks recovered from the weakness of the prior week, as positive economic data and odds of a fiscal stimulus rose—with several key indexes again reaching record highs.

Foreign stocks behaved in similar fashion to domestic stocks last week, with concerns over continued high virus counts, as well as vaccine supply shortages and delays in distribution. There was very little differentiation by region. GDP results for several European countries came in as expected, showing minimal growth at all, and 2021 estimates are a few percent below those in the U.S.

Economic data for the holiday-shortened week included a sharp rise in manufacturing and improvements in several housing metrics—the latter continuing a trend higher from recent months. Equity markets in the U.S. and abroad gained last week as the new Biden administration looks to pass additional stimulus legislation.

Global stock markets declined last week, with mixed economic data resulting from continued high Covid cases. Bonds were little changed in the U.S. in keeping with slower rises in interest rates, while foreign bonds were hampered by a stronger U.S. dollar last week. Commodities were mixed to neutral in several key areas, such as energy, but agricultural prices saw a spike due to rising demand.

November was the best single stock performance month in decades, with the S&P up 11%. Interestingly, the S&P 500 stock index performance has broadened in recent weeks, from only a handful of mega-cap growth stocks in the lead, to over 90% of the index members trading above their 200-day moving average

By sector, energy stocks gained nearly 10% last week with optimism for 2021 pointing to stronger energy demand. Cyclical financials, industrials, and consumer discretionary stocks also earned several percent; on the other hand, health care was the only sector losing ground, with news of the President considering executive action concerning prescription drug prices. Real estate also declined on the week.

World equity markets moved in different directions last week, with U.S. stocks declining and foreign stocks rising. Bonds fared well, as interest rates globally declined. Commodities also gained along with higher crude oil and industrial metals prices.

Global equity markets rallied strongly upon the more solidified U.S. election results from the prior week, and the announcement of promising Covid vaccine trials. Bonds fell back in keeping with higher interest rates, and foreign bonds from a stronger dollar. Commodities also rallied, with oil prices following expected improvement in petroleum demand.

Of special near-term interest is the plight of U.S. tech companies, which have been the single bright light of 2020 for investors, and have led the S&P higher—puzzling many. In fact, it’s been a smaller group of tech giants that have led the market’s results, with the rest of the S&P showing far less impressive returns (including many high quality, dividend-paying stalwarts).

What’s the status of potential stimulus?

Following some optimism early in the week, the Senate was unable to come to an agreement, despite the relatively small monetary difference between the amounts proposed by House Speaker Pelosi, the Senate Republicans, and Treasury Secretary Mnuchin

Economic data for the week included strength in retail sales and consumer sentiment, regional manufacturing reports were mixed, while industrial production fell back. Producer and consumer inflation ticked up slightly, while jobless claims remain challenged.

Economic data for the week included a rise in durable goods orders and strong housing results, while jobless claims remained elevated.