In this week’s recap: stocks see a mixed week, as COVID-19
cases rise, and news of vaccine emerges.
Weekly Economic Update
THE WEEK
ON WALL STREET
Stocks
were mixed last week as investors reacted to positive economic data, progress
on a COVID-19 vaccine, and the continued nationwide increase of COVID-19 cases.
The
Dow Jones Industrial Average gained 2.29%, while the Standard & Poor’s 500
rose by 1.25%. But the Nasdaq Composite Index dropped 1.08% for the week. The
mega-cap technology companies saw some profit-taking last week, sending the
Nasdaq Composite to its first loss in three weeks. The MSCI EAFE Index, which
tracks developed stock markets overseas, ended 2.19% higher.1,2,3
Stocks
Find a Way Higher
After
a Monday rally melted away on news that California was rolling back its
reopening plans amid rising infections, a new earnings season began on a
hopeful note. Stocks posted back-to-back daily gains on the strength of
positive earnings surprises from a few money center banks and encouraging news
about progress in the development of a COVID-19 vaccine.4
Despite a strong retail sales number, new
jobless claims and rising U.S.-China tensions reminded investors that global
economic recovery remains fragile, leading stocks to pare some of the week’s
earlier gains.5,6
Earnings
Season Begins
While
investors long ago accepted the idea that this earnings season would be ugly,
reflecting the impact of the economic shock due to COVID-19, it didn’t mean
that there weren’t important insights to be gained from this quarter’s earnings
reports.
Three
money center banks last week kicked off the earnings season, reporting
substantial declines in profits and an additional cumulative $28 billion set
aside for loan-loss reserves.7
Banks
are an important economic bellwether since they touch every part of the U.S. economy.
Although their earnings were significantly lower, they actually beat consensus
Wall Street estimates, which encouraged investors and set the stage for stocks
to move higher. The story on this quarter’s earnings season, however, is far
from finished as investors await the stream of companies releasing their
quarterly results in the days and weeks ahead.
T I P O F
T H E W E E K
If you’re financing a new car, look for the best interest rate before setting foot in the dealership. It could be to your advantage to take a cash rebate and get a loan elsewhere.
THE WEEK
AHEAD: KEY ECONOMIC DATA
Wednesday: Existing Home Sales.
Thursday: Index of Leading Economic Indicators. Jobless
Claims.
Friday: New Home Sales.
Source:
Econoday, July 17, 2020
The Econoday economic calendar lists upcoming U.S. economic data
releases (including key economic indicators), Federal Reserve policy meetings,
and speaking engagements of Federal Reserve officials. The content is developed
from sources believed to be providing accurate information. The forecasts or
forward-looking statements are based on assumptions and may not materialize.
The forecasts also are subject to revision.
THE WEEK
AHEAD: COMPANIES REPORTING EARNINGS
Tuesday: Lockheed Martin (LMT), Snap (SNAP), Coca Cola (KO),
Texas Instruments (TXN), Capital One Financial (COF).
Wednesday: Microsoft (MSFT), Tesla (TSLA), United Airlines
(UAL).
Thursday: AT&T (T), Intel (INTC), Union Pacific (UNP).
Friday: Verizon (VZ), American Express (AXP).
Source:
Zacks, July 17, 2020
Companies
mentioned are for informational purposes only. It should not be considered a
solicitation for the purchase or sale of the securities. Investing involves
risks, and investment decisions should be based on your own goals, time
horizon, and tolerance for risk. The return and principal value of investments
will fluctuate as market conditions change. When sold, investments may be worth
more or less than their original cost. Companies may reschedule when they
report earnings without notice.
Q U O T E O F T H E W E E K
“Learn to express rather than
impress.”
JIM ROHN
T H E W E E K L Y
R I D D L E
Is there a way that you can
make the number seven even?
LAST WEEK’S
RIDDLE: A parking lot has 1,000 parking spaces, 40% of them for compact cars.
There are 200 compact cars and some standard-size cars in the lot, which is 75%
full. How many standard-size cars are in the lot?
ANSWER: 750 -
200 = 550 standard-sized cars.
Troy L Thompson, CFP may be
reached at 515-432-5421 or troy@thompsonfinancialinc.com
www.thompsonfinancialinc.com
www.thompsonfinancialinc.com
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Troy Thompson, CFP
DBA Thompson Financial and Hanson Asset Strategies
Securities offered through FIRST HEARTLAND CAPITAL, INC.
Member FINRA & SIPC.
Thompson Financial is not affiliated with FIRST HEARTLAND
CAPITAL, INC.
Investing involves risks, and investment decisions should be
based on your own goals, time horizon, and tolerance for risk. The return and
principal value of investments will fluctuate as market conditions change. When
sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on
assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally,
considered representative of their respective markets. Index performance is not
indicative of the past performance of a particular investment. Indexes do not
incur management fees, costs, and expenses. Individuals cannot directly invest
in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is
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U.S. stock market. Nasdaq Composite is an index of the common stocks and
similar securities listed on the Nasdaq stock market and is considered a broad
indicator of the performance of technology and growth companies. The MSCI EAFE
Index was created by Morgan Stanley Capital International (MSCI) and serves as
a benchmark of the performance of major international equity markets, as
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Copyright 2020 FMG Suite.
CITATIONS:
The Wall Street Journal, July 17, 2020
The Wall Street Journal, July 17, 2020
treasury.gov , July 17, 2020
The Wall Street Journal, July 17, 2020
treasury.gov , July 17, 2020
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