The stock market spent most of Wednesday trying to dig itself out of a hole as investors continued to chew on renewed stimulus discussions in Washington.
Earlier in the day, payroll services firm ADP reported that the U.S. added just 307,000 private-sector jobs in November – a firm decline from October's 404,000 jobs created and well below most economists' estimates.
"We see ~400-500k job additions contributing to lower unemployment – in the 6.8% range," say Credit Suisse analysts in a look-ahead to Friday's November nonfarm payrolls report. "We believe the level of employment likely remains below pre-COVID peaks into 2021 – pending further stimulus."
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However, Democratic congressional leaders Nancy Pelosi and Chuck Schumer endorsed a $908 billion bipartisan plan as a starting point for a new coronavirus relief deal before the year is out, while No. 2 House Democrat Steny Hoyer said he was meeting with Senate Majority Leader Mitch McConnell today about some sort of COVID relief measure.
Despite being weighed down by Salesforce.com (CRM, -8.5%), which sagged after officially announcing it would buy workplace communications firm Slack Technologies (WORK, -2.6%), the Dow managed to put up a modest 0.2% gain to 29,883. Boeing (BA, +5.1%) and Walgreens Boots Alliance (WBA, +3.6%) were among the biggest contributors to that effort.
Other action in the stock market today:
- The S&P 500 advanced 0.2% to set yet another all-time high at 3,669.
- The small-cap Russell 2000 edged 0.1% higher to 1,838.
- The Nasdaq Composite actually declined marginally, by less than six points to 12,349.
- Gold futures rose again, by 0.6% to $1,830.20 per ounce.
- U.S. crude oil futures rebounded from Tuesday's declines, improving by 1.5% to $45.21 per barrel.
Bond Investors: How Are You Approaching 2021?
As you start to think about how you'll rebalance your portfolio for 2021, a once-helpful rule of thumb continues to fall into obscurity.
The ol' 60-40 portfolio – 60% in stocks, 40% in bonds – has come under increasing fire for years as interest rates have tumbled, and its critics have only become more vocal in 2020 as rates have hit the floor.
Even then, many calls are for less bond exposure, not no bond exposure. And depending on your financial goals, you still might need a heavy weighting toward fixed income. But how should you go about investing in bonds?
Generally speaking, individual bonds are impractical for most retail investors, so they tend to turn to bond funds like this wide-ranging array of fixed-income products.
But if you're looking to retool specifically for 2021's difficult bond environment, consider this group of seven bond funds that might be up to the task. Yield is going to be difficult to come by, but then, so could bond-price upside, given a scarcity of additional downward drivers to interest rates. The onus, then, is on low costs and either ruthless index efficiency or managerial excellence.
Kyle Woodley was long BA and CRM as of this writing.
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