By: Steven Doll, Portfolio Strategist
The global stock market rose sharply this week with renewed hopes of additional fiscal stimulus both at home and abroad. U.S. small-cap stocks rose over 6.0%, outperforming their large-cap counterparts by over 1.5% as investors see smaller companies benefiting the most from fiscal stimulus. Overseas emerging markets (up nearly 4.0%) continue to outpace developed markets (up nearly 3.0%) as a second wave of COVID-19 cases spread over Europe.
Interest rates jumped this week with expectations of a democratic sweep in November’s election and additional fiscal stimulus. The yield on a 10-year treasury note rose from 0.70% last week to 0.77% today, while the 2-year treasury note rose from 0.13% to 0.15%. Consequently, the total U.S. bond market pulled back approximately 0.2%, but is still up about 6.7% year-to-date.
Despite the rise in interest rates, the price of gold rose over 2.0% on the week as the U.S. dollar continues to weaken on the expectations of additional fiscal stimulus.
Meanwhile the price of crude jumped nearly 6.0% this week as oil production is shutdown in the Gulf of Mexico in anticipation of Hurricane Delta.
Year-to Date Return (as of 10/09/2020)