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Weekly Market Insights header image

Weekly Market Insights

The Markets (as of market close​ ​​J​uly ​​​​31, 2020)

Equities continued their positive run of Mondays by posting solid gains again to start last week. The technology sector led the Nasdaq to power ahead by 1.7%. The small caps of the Russell 2000 advanced 1.2%, and the large caps of the S&P 500 (0.7%) and the Dow (0.4%) also climbed higher last Monday. Crude oil prices and Treasury yields rose, while the dollar declined. Gold prices continued to soar as it reached its highest level in history, a possible indication that investors view the economy as stagnating.

While last Tuesday saw movement on further economic stimulus, that development didn't help stocks. Each of the benchmark indexes lost value, giving back Monday's gains. Less-than-favorable quarterly earnings reports from some major companies sent shares tumbling. The Nasdaq was hardest hit, falling 1.3%, followed by the Russell 2000, which gave back 1.0%. The Dow (-0.8%) and the S&P 500 (-0.7%) also fell last Tuesday. Crude oil prices dipped 1.5%, Treasury yields dropped, while the dollar and gold rose.

After a slow start to the day, stocks rebounded last Wednesday following the Federal Reserve's announcement that interest rates will remain the same and economic stimulus will continue. The Dow rose 0.6%, the S&P 500 advanced 1.3%, and the Nasdaq gained 1.4%. Crude oil prices climbed, while the dollar and Treasury yields fell.

Last Thursday proved to be another tough day for stocks. Only the Nasdaq gained value, rising 0.4% by the end of trading. The remaining benchmark indexes fell behind, led by the Dow, which dropped 0.9%, followed by the Global Dow, which landed -0.8% in the red. Both the S&P 500 and the Russell 2000 lost 0.4%. Investors received little encouraging news on the day. A consensus has yet to be reached on the next round of government pandemic relief. The second-quarter GDP saw the economy regress at a rate of nearly 33%. And claims for unemployment insurance increased for the second straight week.

The week ended with tech stocks surging, driving the Nasdaq ahead 1.5% by the close of trading last Friday. Positive earnings report from some major market moving companies helped drive stocks higher, despite mixed overall earnings results, worries about economic recovery, and increasing virus cases.

The Nasdaq rebounded from a poor start to close last week up 3.7%. The S&P 500 climbed 1.7%, followed by the Russell 2000, which advanced 0.9%. The Dow (-0.2%) and the Global Dow (-1.2%) ended last week in the red. Year to date, the Nasdaq is no longer the only benchmark index in the black. The S&P 500 is now 1.25% ahead of its 2019 year end value following last week's solid performance.

Crude oil prices ended the week at $40.41 per barrel by late Friday afternoon, down from the prior week's price of $40.58. The price of gold (COMEX) continues to surge, climbing for the seventh consecutive week. By the close of trading last Friday, the price of gold was $1,989.90, up from the prior week's price of $1,899.60. The national average retail price for regular gasoline was $2.175 per gallon on July 27, $0.011 lower than the prior week's price and $0.540 less than a year ago.

Market/Index

2019 Close

Prior Week

As of 7/31

Weekly Change

YTD Change

DJIA

28,538.44

26,469.89 26,428.32

-0.16%

-7.39%

Nasdaq

8,972.60

10,363.18 10,745.27  3.69% 19.76%

S&P 500

3,230.78

3,215.63

3,271.12

1.73% 1.25%

Russell 2000

1,668.47

1,467.55

1,480.43
0.88% -11.27%

Global Dow

3,251.24 2,956.92 2,920.53
-1.23%
-10.17%

Fed. Funds target rate

1.50%​–1.75%

0.​00%​–0.25%

0.​00%​–0.25%

 0 bps

-150 bps

10-year Treasuries

1.91%

0.58%

0.53%

-5 bps

-​​​​​1​38 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic Headlines

  • Following its latest meeting, which concluded on July 29, the Federal Open Market Committee decided to maintain the federal funds target rate range at its current 0.00%-0.25%. Mirroring its statement last June, the Committee noted that although economic activity and job growth have picked up recently, it is nowhere near the levels reached at the beginning of the year. In fact, overall financial conditions have improved due to policy measures to support the economy and the flow of credit to U.S. households and businesses. In keeping with that trend, the Committee decided to hold quantitative easing in place and will increase holdings of Treasuries and mortgage-backed securities at least at the current pace. The FOMC isn't scheduled to meet again until September.
  • We knew the pandemic took a big bite out of the economy, but the initial report on gross domestic product for the second quarter shows the enormity of the drop. The second-quarter GDP decreased at an annualized rate of 32.9% according to the first, or advance, estimate. Consumer spending dropped 34.6%, nonresidential fixed investment fell 27.0%, and residential investment plummeted 38.7%. Exports plunged 64.1% and imports sank 53.4%. Much of the drag on the economy happened in April and parts of May. What will the third-quarter GDP look like? It should reflect improvement based on available information and reports from June and July.
  • According to the latest information from the Bureau of Economic Analysis, consumer prices increased 0.4% in June, although personal income and disposable (after-tax) income decreased 1.1% and 1.4%, respectively. Consumer spending ramped up 5.6% in June. The decrease in personal income in June was more than accounted for by a decrease in government social benefits to persons as payments made to individuals from federal economic recovery programs in response to the COVID-19 pandemic continued, but at a lower level than in May. Partially offsetting the decrease in other government social benefits were increases in compensation of employees and proprietors' income as portions of the economy continued to reopen in June. Over the past 12 months ended in June, prices for consumer goods and services are up only 0.8% and 0.9%, excluding food and energy — well below the Fed's 2.0% target rate for inflation.
  • New orders for manufactured durable goods increased 7.3% in June following a 15.1% increase in May. Much of the increase centered around transportation, which climbed 20.0% last month. Excluding transportation, new orders for durable goods rose 3.3% in June. Shipments jumped 14.9%; unfilled orders, down three of the last four months, decreased 1.4%; while inventories inched up 0.1%. New orders for nondefense capital goods (assets used to produce consumer goods) fell 16.4% in June.
  • The international trade in goods deficit was $70.6 billion in June, down $4.6 billion from May. Exports of goods for June were $102.6 billion, $12.5 billion more than May exports. Imports of goods for June were $173.2 billion, $7.9 billion more than May imports. A surge in both exports and imports of motor vehicles drove the overall June advance.
  • For the week ended July 25, there were 1,434,000 claims for unemployment insurance, an increase of 12,000 from the previous week's level, which was revised up by 6,000. According to the Department of Labor, the advance rate for insured unemployment claims was 11.6% for the week ended July 18, an increase of 0.5 percentage point from the prior week's rate. The advance number of those receiving unemployment insurance benefits during the week ended July 18 was 17,018,000, an increase of 867,000 from the prior week's level, which was revised down by 46,000.

Eye on the Week Ahead

The first week of August focuses on manufacturing, international trade, and employment. Purchasing managers reported growth in the manufacturing sector in June. As more businesses opened in July, it is expected that the latest report for July will show further growth in manufacturing. The international trade in goods and services deficit was $55 billion in May. The deficit is expected to narrow slightly for June. There were 4,800,000 new jobs added in June, although average earnings fell 1.2%. July is expected to see a slight drop in the number of new jobs created compared to June.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Market summaries contain information on the Dow, S&P 500, NASDAQ, Russell 2000, Global Dow, Federal Funds interest rate, and 10-year Treasury yields, as well as highlights of past and future economic data.

The Markets (as of market close​ ​​J​uly ​​​24, 2020)

Last week started off on a high note as stocks reached levels not seen since February. The Nasdaq gained 2.5% last Monday, led by a surging Amazon and Zoom Technologies soared to a record high following the publication of positive COVID-19 vaccine results. Investors were encouraged by signs out of Washington that additional stimulus was on the way. The S&P 500 advanced 0.8% on the day while the Dow's gain was negligible.

The Russell 2000 recovered from a poor Monday by gaining 1.3% last Tuesday to lead the benchmark indexes listed here. The Global Dow rose 0.9%, buoyed by a new round of economic stimulus from the European Union. The Dow climbed 0.6%, and the S&P 500 inched up 0.2%. The Nasdaq retreated from its record high on Monday, giving back 0.8% last Tuesday.

Wednesday saw equities rise despite an increase in tensions between the United States and China. Pfizer vaulted 5.1% on positive COVID-19 vaccine developments. The Dow and the S&P 500 each gained nearly 0.6%, with the latter reaching a five-month high. The Nasdaq and the Russell 2000 each gained 0.2% on the day.

Stocks ended a 4-day run last Thursday, falling to their lowest levels in a week. An unanticipated rise in unemployment claims and lower-than-expected earning reports from some major tech companies contributed to the decline. Stock prices fell for some of the major market players including Amazon, Alphabet (Google), Facebook, Microsoft, Apple, and Tesla. The Nasdaq plunged 2.3% followed by the Dow, which fell 1.3%. The S&P 500 dropped 1.2%. Crude oil prices, the dollar, and Treasury yields all declined.

Equities ended last week on a sour note with each of the indexes listed here losing value. The Russell 2000 dropped 1.5% on the day, followed by the Nasdaq (-0.9%), the Dow (-0.7%), the Global Dow (-0.7%), and the S&P 500 (-0.6%). Investors seemed concerned over escalating discord between the United States and China, disappointing earnings reports, and the likelihood of more fiscal stimulus.

Last week saw the run of solid market gains end as each of the benchmark indexes listed here posted losses. The Nasdaq, which had strung together several weeks of gains, fell back for the second consecutive week. The large caps of the Dow and the S&P 500 also lagged after advancing for three consecutive weeks. Year-to-date, the Nasdaq is still well ahead of its 2019 closing value, while the S&P 500 is within 0.5% of breaking even. The Dow, Global Dow, and Russell 2000 remain well off their respective 2019 closing marks.

Crude oil prices ended the week at $41.18 per barrel by late Friday afternoon, up from the prior week's price of $40.58. The price of gold (COMEX) advanced for the sixth consecutive week, closing at $1,899.60, up from the prior week's price of $1,812.20. The national average retail price for regular gasoline was $2.186 per gallon on July 20, $0.009 lower than the prior week's price and $0.564 less than a year ago.

Market/Index

2019 Close

Prior Week

As of 7/24

Weekly Change

YTD Change

DJIA

28,538.44

26,671.95 26,469.89

-0.76%

-7.25%

Nasdaq

8,972.60

10,503.19 10,363.18  -1.33% 15.50%

S&P 500

3,230.78

3,224.73

3,215.63

-0.28% -0.47%

Russell 2000

1,668.47

1,473.32

1,467.55
-0.39% -12.04%

Global Dow

3,251.24 2,959.80 2,956.92
-0.10%
-9.05%

Fed. Funds target rate

1.50%​–1.75%

0.​00%​–0.25%

0.​00%​–0.25%

 0 bps

-150 bps

10-year Treasuries

1.91%

0.62%

0.58%

-4 bps

-​​​​​1​33 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic Headlines

  • Sales of existing homes rebounded in June following declines in March, April, and May. According to the latest report from the National Association of Realtors®, total home sales jumped 20.7% last month from May. However, existing home sales are 11.3% below their pace of a year ago. The median existing-home price for all housing types in June was $295,300 ($284,600 in May), up 3.5% from June 2019. Total inventory is up 1.3% in June and sits at a four-month supply. Sales of existing single-family homes also surged in June, climbing 19.9% from May. Single-family home sales are down 9.9% from a year ago. The median existing single-family home price was $298,600 in June, up 3.5% from June 2019.
  • New single-family home sales also surged in June, climbing 13.8% above May's totals. Sales of new single-family homes are 6.9% above the June 2019 estimate. The median sales price of new houses sold in June 2020 was $329,200. The average sales price was $384,700. Inventory of new single-family homes for sale in June was 307,000, representing a 4.7-month supply at the current sales rate.
  • For the week ended July 18, there were 1,416,000 claims for unemployment insurance, an increase of 109,000 from the previous week's level, which was revised up by 7,000. According to the Department of Labor, the advance rate for insured unemployment claims was 11.1% for the week ended July 11, a decrease of 0.7 percentage point from the prior week's revised rate. The advance number of those receiving unemployment insurance benefits during the week ended July 11 was 16,197,000, a decrease of 1,107,000 from the prior week's level, which was revised down by 34,000.

Eye on the Week Ahead

The last week of July will focus on the first estimate for the second-quarter gross domestic product. The GDP decreased 5.0% in the first quarter of 2020. The June report on personal income and spending is out at the end of the week. Not unexpectedly, personal income fell 4.2% in May, but consumer spending increased 8.2%. The June tally should show better numbers for income, as many businesses ramped up operations last month.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment. 

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Market summaries contain information on the Dow, S&P 500, NASDAQ, Russell 2000, Global Dow, Federal Funds interest rate, and 10-year Treasury yields, as well as highlights of past and future economic data.

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