With only a few big economic decisions left in the year, the trading community already prepares for 2021. Today is Thanksgiving, and the stock market in the United States will be open only for a few hours on Friday, with banks also closed. Hence, why many believe the trading week is over.
Next week we have the NFP, the week that follows, the ECB, and the very next one, the Fed. And that is about it for 2020. Considering that Christmas and New Year come on Thursdays, the last two weeks of December will be discounted by traders and investors.
Hence, we should not be surprised by the investing community already looking back at 2020. Here is where we stand with a month or so until the end of the trading year, according to Bank of America.
Bitcoin and FAANG Stocks
Bitcoin leads the way, up 157.8% at the time of the Bank of America report last week. It is not a surprise, considering the fabulous bounce it had from the lows. Those that managed to buy at the March low and held on to their positions close to $20,000 enjoyed a rally of over 300%. However, the Bank of America’s report refers to the performance compared to the start of the trading year.
FAANG stocks follow – Facebook, Amazon, Apple, Netflix, and Google – with 78.7%. Again, not really a surprise considering that they all strived under the new conditions during the pandemic – lockdowns, remote work, online shopping, and more along these lines.
China’s technology sector follows in a surprising third place. It rose 47.1% this year, a double-digit growth that rewards investors in the technology sector in China.
Unsurprisingly during a pandemic year, biotech companies performed decently well, up 43.4%. Silver follows with 19.5%, and, from the fixed-income side, the 30-year Treasury with 19.1%.
How about the losers? Energy stocks lead the pack with -35.4%, followed by banks with -21.3% and UK stocks with -13.8%. The list ends with REIT’s underperforming by -9.1%.
A mixed year if we interpret the overall picture. Despite a massive rally on the equity markets in the United States, there were still some areas worth shorting – e.g., UK stocks and energy stocks.
What will the rest of the year bring? More importantly – what will 2021 bring?