This is the top story from our daily newsletter published on November 25, 2020. To have this and more delivered directly to your inbox scroll down and enter your email or click here to sign up.
Top Story from the Wall Street Journal news team: “The Dow Jones Industrial Average rose above 30,000 on Tuesday, extending an eight-month rebound that has taken many analysts by surprise. The run has put the Dow up more than 60% from its March low, when the U.S. Federal Reserve ended a panic that wiped out trillions of dollars in investments by outlining a plan to counter the pandemic’s economic stress.” Here’s how business outlets on both sides covered the historic milestone:
On the Left: Writing for CNN Business, Paul R. La Monica titled his article: “Dow tops 30,000 for the first time ever as Biden transition begins.” La Monica said, “Investors have a lot to be thankful for this holiday-shortened week” and “The latest catalyst appears [to be] that a formal transition from President Donald Trump to President-elect Joe Biden is finally underway.” La Monica says the Dow’s gains can also be attributed to “more promising coronavirus vaccine developments on Monday, as well as sources confirming to CNN that former Federal Reserve chair Janet Yellen will be Biden’s nominee for Treasury Secretary.” La Monica adds: “Cannabis stocks Aurora (ACB), Tilray (TLRY), Canopy Growth (CGC) and Cronos (CRON) also soared again Tuesday, extending their stellar run this month as investors bet that a Biden administration could seek to decriminalize marijuana at a federal level. Several more states also legalized recreational cannabis.”
On the Right: Writing for Fox Business, Jonathan Garber titled his take: “Dow 30,000 makes history, S&P hits fresh record on Yellen, vaccine optimism.” Garber says: “Vaccine optimism combined with another solid read on U.S. home prices drove a broad market rally led by Dow members Chevron, JPMorgan and IBM.” Garber also pointed out that President Trump, speaking at the White House, called the level a “sacred number.” For what it’s worth, CNN’s La Monica didn’t mention Trump’s name once. Fox’s Garber added: “The rally was also supported by the likelihood that projected President-elect Joe Biden will formally appoint former Federal Reserve Chair Janet Yellen as his would-be Treasury secretary.” Unlike La Monica, Garber doesn’t tie the rally to the Biden transition at all. Rather, he notes how, “Tesla shares finished in record territory, above $500 for the first time… Dick’s Sporting Goods CEO Ed Stack will step down from his role at the end of January… and the consumer confidence index dipped in November.”
Flag This: CNN chalks the Dow’s gains up to a Biden-bump while Fox News gives a nod to Trump. It’s a tale as old as time. Zooming out, yesterday’s recovery rally was driven by optimism surrounding 2021 growth prospects in light of recent coronavirus vaccine announcements from a handful of high-profile companies. With the US election in the rearview mirror, political uncertainty is also fading to some extent. These two factors, along with a low-interest-rate environment, are creating less friction for equities to move higher. Layered on top are emotional drivers such as performance chasing and FOMO, or fear of missing out. As a result, there were broad-based gains on the second day of the week. On the whole, the 30-stock Dow advanced 455 points or 1.5%. Meanwhile, the S&P 500 climbed 1.6% and the Nasdaq Composite advanced 1.3%. Both the S&P and small-cap Russell 2000 hit all-time highs.