What a month November was! Here are some of the highlights:
• Best month for Dow since January 1987 (11.9%) and best November since 1928
• Best month ever for the STOXX 600 (16.7%)
• Best month ever for the Russell 2000 (18.3%)
• Best month for the S&P 500 (10.8%) and Nasdaq (11.8%) since April 2020
• Best month for Dow Transports since October 2011 (12.1%)
• Best month from PHLX Semiconductor Index since March 2003 (18.4%)
• Best month for Industrials (16.0%) and Financials (16.8%) since April 2009
• Second best month ever for energy (28.0%)*
“A way better than expected earnings season, a likely split Congress, and major breakthroughs on the vaccine front all helped stocks soar last month,” explained LPL Financial Chief Market Strategist Ryan Detrick. “Add ongoing support from the Federal Reserve as the cherry on top and we are looking at a truly historic month on many levels.”
Here are all the Dow monthly returns since 1990. Last month was the best return since January 1987. Now before you go out and sell because you see 1987, remember the S&P 500 added another 20% the seven months after the huge gains in early 1987.
It was the best November for the S&P 500 since November 1928.
Small caps soared on the likelihood of taxes staying lower due to a divided Congress and vaccine progress, with the Russell 2000 adding more than 18% for the best month ever, topping the previous record from February 2000.
What happens after a big month? Well, history says a 10% monthly gain is quite bullish. In fact, we had a 10% plus rally back in April 2020 and shared this same chart at that time. Sure enough, returns have been strong this time around as well. “The bottom line is the huge gains in November could actually be the start of something much stronger,” according to Ryan Detrick. “Also, this was the second month of 2020 with a 10% gain. The only other year to do that? 1982, which kicked off a historic bull market.”
