- Retail sales fell a seasonally adjusted 1.1% in November from the prior month
- The Federal Reserve will maintain monthly bond purchases at $120 billion
- Tesla will join S&P 500 as the index’s 7th largest company with a market capitalization of nearly $600 billion
Top Three Market Headlines
Retail Sales Dip: The U.S. Department of Commerce reported last week that spending at online retailers, restaurants, and brick-and-mortar stores fell 1.1% in November from the prior month. In addition, the Department revised downward its report of October sales to -0.1%. The recent slowdown, which halted five straight months of growth through September, comes amid the reported increase in Covid-19 cases that prompted renewed restrictions on consumer and business activity in parts of the U.S. Despite the slowdown versus the prior month, however, sales in November were nonetheless 4.1% higher than the prior year’s pace.
Federal Reserve Pledges to Maintain Monetary Stimulus: The Federal Reserve said last week that it will continue to purchase Treasury and mortgage-backed securities at a pace of $120 billion a month while also keeping the federal-funds rate near zero. Fed officials also provided more clarity on the purchases, stating they would continue “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals.” Additionally, Fed Chairman Jerome Powell once again stressed the need for fiscal support.
Tesla Set to Join S&P 500 Index: Tesla, whose stock has posted an astronomical return of approximately 650% year-to-date, will be added to the S&P 500 index on Monday, December 21. With a market capitalization of around $600 billion, Tesla is projected to immediately be the index’s 7th largest stock and the most valuable company to ever join. There is an estimated $4.5 trillion worth of funds that track the index, and Tesla’s entry will lead to billions of dollars in trade activity as index funds position Tesla as their 7th largest holding.Please note: This will be the last Weekly Market Update that will be published in 2020. We would like to wish everyone a happy holiday season!