In this week’s recap: stocks slip after heavier jobless
claims and U.S.-China strife.
Weekly Economic Update
THE WEEK
ON WALL STREET
Stocks
slipped in the final days of trading last week on higher jobless claims and
rising tensions in the U.S.-China relationship.
The
Dow Jones Industrial Average lost 0.76%, while the Standard & Poor’s 500
dipped 0.28%. The Nasdaq Composite Index dropped 1.33% for the week. The MSCI
EAFE Index, which tracks developed stock markets overseas, rose 1.24%.1,2,3
Stocks
Lose Momentum
Stocks
marched higher to begin the week on progress with a COVID-19 vaccine and a
string of upbeat corporate quarterly reports. Firming oil prices and the
passage of a fiscal stimulus bill by the European Union also helped buoy
investors’ spirits.
Market
sentiment, however, turned negative after Thursday morning’s report of an
uptick in new unemployment claims, which suggested a possible slowdown in
hiring. The market was led lower by the technology sector ahead of quarterly
reports from some of the sector’s biggest names.4
U.S.-China
Tensions Escalate
Tensions
escalated last week as the U.S. ordered China to close its consulate in
Houston, which the White House claimed was stealing American information. A day
earlier, the U.S. had accused China of attempting to steal COVID-19 research
data. China responded by ordering the U.S. to close its consulate in the city
of Chengdu.5,6
The
markets appear more focused on the apparent deteriorating relations between the
two nations, worried about a repeat of the trade battle in 2018. Whether the
rancor is managed is likely to remain a top concern for investors in the weeks
ahead.
FINAL THOUGHTS
The
mega-cap technology companies’ market dominance is a concern to some. Last week
it was reported that six of these mega-cap stocks represent 41% of the Nasdaq
market capitalization. Five mega-cap names included in the S&P 500 Index
account for 22% of that index’s market capitalization.7
Investors
have embraced these firms because they appear to be able to show solid
financial performance in the midst of an economy coping with COVID-19.
T I P O F
T H E W E E K
Periodically review and/or rebalance your portfolio, to see that your investments are in sync with your objectives.
THE WEEK
AHEAD: KEY ECONOMIC DATA
Monday: Durable Goods Orders.
Wednesday: Federal Open Market Committee (FOMC) Meeting Announcement.
Thursday: Gross Domestic Product (GDP), Jobless Claims.
Friday: Consumer Sentiment.
Source:
Econoday, July 24, 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: Advanced Micro Devices (AMD), Visa (V), Pfizer (PFE),
McDonalds (MCD), 3M Company (MMM), eBay (EBAY), D.R. Horton (DHI).
Wednesday: Facebook (FB), Boeing (BA), Qualcomm (QCOM), PayPal
(PYPL), General Motors (GM), Shopify (SHOP), Teladoc Health (TDOC).
Thursday: Apple (AAPL), Ford (F), Alphabet (GOOGL),
Mastercard (MA), Procter & Gamble (PG), Eli Lilly (LLY), United Parcel
Service (UPS).
Friday: AbbVie (ABBV), Exxon Mobil (XOM), Caterpillar
(CAT), Merck (MRK), Chevron (CVX).
Source:
Zacks, July 24, 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
“Imagination is the eye of
the soul.”
JOSEPH JOUBERT
T H E W E E K L Y
R I D D L E
How many 9s are in the range
of numbers from 1 to 100? (Remember, the number 99 has two 9s in it.)
LAST WEEK’S
RIDDLE: Is there a way that you can make the number seven even?
ANSWER: Take
away the S, and seven becomes even.
Troy L Thompson, CPF 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
generally considered representative of large-capitalization companies on the
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
represented by 21 major MSCI indexes from Europe, Australia, and Southeast
Asia. The S&P 500 Composite Index is an unmanaged group of securities that
are considered to be representative of the stock market in general.
U.S. Treasury Notes are guaranteed by the federal government as
to the timely payment of principal and interest. However, if you sell a
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price paid. Fixed income investments are subject to various risks including
changes in interest rates, credit quality, inflation risk, market valuations,
prepayments, corporate events, tax ramifications and other factors.
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and the potential for illiquid markets. These factors may result in greater
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Please consult your financial professional for additional
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This content is developed from sources believed to be providing
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Copyright 2020 FMG Suite.
CITATIONS:
CHART CITATIONS:
The Wall Street Journal, July 24, 2020
The Wall Street Journal, July 24, 2020
treasury.gov, July 24, 2020
The Wall Street Journal, July 24, 2020
treasury.gov, July 24, 2020
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