Stocks continued to rally this week buoyed by strong performance in the small cap space. The Russell 2000 (small cap index) gained about 3% mid-week compared to about 1% for the S&P 500 (large cap index). Value and dividend paying stocks also outperformed growth with sectors like Energy, Financials, and Industrials leading the way. While the coronavirus pandemic continues to escalate across the U.S. and Europe, optimism surrounding rapidly improving vaccine prospects helped boost investor sentiment. On the data front, U.S. retail sales data rose by 0.3% in October, the slowest pace in six months. With consumer spending making up about two-thirds of the U.S. economy, these figures highlight the need for additional fiscal stimulus to keep the economy afloat while a vaccine is developed and distributed. Interest rates were relatively flat this week, with the yield on the 2-year and 10-year Treasury notes trading around 0.18% and 0.87% respectively mid-week.
Source: GSAM, CNBC, JPM, Bloomberg