General Market Commentary as of December 31, 2020
U.S. markets ended the year strong in Q4. The S&P 500 finished the quarter up 11.69%, the Dow Jones Industrial Average was up 10.17%, and the Nasdaq Composite finished up 15.41%. For the year, they finished in record territory with the S&P 500 up 16.26%, the Dow Jones Industrial Average up 7.25%, and the Nasdaq Composite up 43.64%. In the quarter, the U.S. equity market underperformed non-U.S. developed markets and emerging markets. Value outperformed growth across large and small cap stocks. Small caps outperformed large caps and Small value ranked at the top with a 33.36% return for the quarter.
Interest rate changes were mixed in the U.S. Treasury fixed income market during the fourth quarter of 2020. The yield on the 5-Year U.S. Treasury note increased 8 basis points (bps), ending at 0.39%. The yield on the 10-Year Treasury increased 29 bps to 0.93%. The 30-Year U.S. Treasury bond yield increased 18 bps to finish at 1.64%. On the short end of the yield curve, the 1-Month US Treasury bill yield remained unchanged at 0.08%, while the 1-Year U.S. T-bill yield decreased 1 bps to 0.13%. The 2-Year U.S. Treasury note yield finished unchanged at 0.09%.
The year 2020 proved to be one of the most tumultuous in modern history, marked by a number of developments that were historically unprecedented. But the year also demonstrated the resilience of people, institutions, and financial markets. Governments and central banks worked to cushion the blow, providing financial support for individuals and businesses by adjusting lending rates. For investors, the year was characterized by sharp swings for stocks. Ultimately, despite a sequence of epic events and continued concerns over the pandemic, global stock market returns in 2020 were above their historical norm.
Market Recap
| Tot Return | 3-MO* | 12-MO* | 3-Year* | 5-Year* | Closing Value |
|---|---|---|---|---|---|
| S&P 500 | 11.69% | 16.26% | 12.00% | 12.94% | 3,756.07 |
| Dow Jones Industrial Average | 10.17% | 7.25% | 7.38% | 11.93% | 30,606.48 |
| NASDAQ Composite | 15.41% | 43.64% | 23.13% | 20.81% | 12,888.28 |
Source: Morningstar. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite are unmanaged indexes. It is not possible to invest in an index. Past performance is no guarantee of future results. * Price only. Does not include dividends.
All overviews and commentary are intended to be general in nature and for current interest, educational purposes and factual reference only and are subject to change based on market and other conditions.
