Dow Nicks New High in 2020’s Penultimate Session

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Stocks quietly crept higher Wednesday as low volume on Wall Street accompanied heavy gridlock in Washington.

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The Senate adjourned late Tuesday without taking action on the House’s recently passed bill to hike stimulus payments to $2,000. For now, $600 payments are already starting to hit Americans’ bank accounts.

On Wednesday, the U.K. became the first country to approve a two-dose COVID-19 vaccine from AstraZeneca (AZN, +0.6%) and Oxford University, but that good news was blunted by yesterday’s reported 3,725 coronavirus deaths in the U.S. – a new daily high.

One market firework of note today: New S&P 500 component Tesla (TSLA, +4.3%) jumped to within just a few dollars of its previous all-time high after Wedbush analyst Daniel Ives said the electric vehicle stock’s goal for 500,000 deliveries in 2020, while “not even on the map … going back to the late spring/early summer timeframe,” is now within reach thanks to strength in China and Europe.

The major indices all finished a little higher, including the Dow Jones Industrial Average, whose 0.2% gain to 30,409 was just enough for yet another record close.

Other action in the stock market today:

  • The S&P 500 edged 0.1% higher to 3,732.
  • The Nasdaq closed with a 0.2% gain to 12,870.
  • The Russell 2000 rebounded strongly, up 1.1% to 1,979.
  • U.S. crude oil futures improved by 0.8% to $48.40 per barrel.
  • Gold futures climbed 0.6% to settle at $1,893.40 per ounce.

graphical user interface, chart: stock chart for 123020

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stock chart for 123020

Video: Market researcher Jim Bianco: Inflation is the big worry I have for 2021 (CNBC)

Market researcher Jim Bianco: Inflation is the big worry I have for 2021



More Forecasts for a Bumpy 2021 Start

A fruitful year with a turbulent start. Why yes, we could be describing the stock market in 2020 – the S&P 500, with just one more trading day to go, is on pace to finish with a 17%-18% total return (price plus dividends) despite COVID dragging the economy into recession.


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But no, we’re talking about how an increasing number of analysts are describing their outlooks for 2021.

For 2021, CFRA chief investment strategist Sam Stovall says his firm is targeting S&P 4,080, or a 9.5% return, in 2021, but “domestic equity markets appear to us to have over-discounted a second-half 2021 economic and EPS recovery, however, and as a result may be vulnerable to a Q1 pullback.”

“The Russell 2000 is currently more than 30% above its 200-day moving average, the S&P 500’s next-12-month (NTM) P/E ratio trades at a 42% premium to its 20-year average, and the 12-month return differential for S&P 500 growth-value indices remains at a level last seen in December 1999,” he says.

Practically speaking, that means a few things for investors. For one, you still have a little time to exit stocks that are facing more headwinds in 2021 than most. And if you’re looking to put money to work, you have two choices: 1) Buy at the start of the year, and steel yourself for a potentially choppy first few months, or 2) Wait for a dip to buy into 2021’s best stocks and funds.

However you decide to proceed, start your wish list with these 21 best stocks for 2021 – a group of picks that are either expected to benefit from a 2021 “return to normalcy” or ride emerging trends to red-hot returns in the year to come.

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