In this week’s recap: Stocks rise as earnings season winds
to an end; no results in fiscal stimulus talks.
Weekly Economic Update
THE WEEK
ON WALL STREET
Overlooking
stalled efforts by Congress to pass a new fiscal stimulus bill, stocks marched
higher last week with the Dow Jones Industrials leading the way and the NASDAQ
Composite setting multiple fresh record highs.
The
Dow Jones Industrial Average gained 3.80%, while the Standard & Poor’s 500
rose by 2.45%. The Nasdaq Composite index climbed 2.47% for the week. The MSCI
EAFE index, which tracks developed overseas stock markets, advanced 2.31%.1-3
Earnings
Season Winds Down
A
string of encouraging news reports, including a decline in new COVID-19 cases
nationwide, pushed stock prices higher throughout the week. Stocks also rallied
on signs of a pick-up in manufacturing activity, factory orders that came in
well above estimates, and a better-than-expected new jobless claims number.4,5
Congress
wasn’t able to come to an agreement on a stimulus package, which disappointed
some investors. But it wasn’t enough to slow the daily climb in the equity
markets, with the NASDAQ Composite index closing above 11,000 for the first
time, while the S&P 500 index closed in on its record high set in February
of this year.6
Stocks
drifted on Friday even though the employment report showed that employers added
1.8 million jobs in July, lowering the unemployment rate to 10.2%.7
One Eye
on Bonds, Gold
The
continued rally in stock prices appears to suggest that the U.S. economy may
maintain its recovery through the second half of the year and into 2021. But
the bond market and gold prices suggest a different outlook.
Last
week the yield on 10-year Treasuries touched their lowest level since early
March, signaling that bond investors may be less convinced about economic
prospects.8
Meanwhile,
gold traded over $2,000 per ounce. While the rise in gold prices this year has
been largely propelled by historically low interest rates, its reputation as a
store of value has attracted investors worried about stock market volatility
and a potential uptick in inflation.9
FINAL Thoughts
It
was reported last week that the U.S. and China agreed to meet by
videoconference on August 15 to discuss compliance with the terms of the Phase
One trade deal.10
With
tensions running high between the two nations, expect Wall Street to keep a
close eye on any developments that may appear connected to the virtual meeting.
T I P O F
T H E W E E K
If a major financial or life event is coming up on your calendar, talk to a financial professional about it now. See what ideas they may have about how to manage the event.
THE WEEK
AHEAD: KEY ECONOMIC DATA
Monday: Job Openings and Labor Turnover Survey (JOLTS).
Wednesday: Consumer Price Index (CPI).
Thursday: Jobless Claims.
Friday: Retail Sales. Industrial Production. Consumer
Sentiment.
Source:
Econoday, August 7, 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
Monday: Marriott International (MAR).
Wednesday: Cisco Systems (CSCO), Tencent Holdings (TCEHY),
Lyft (LYFT).
Friday: Draftkings (DKNG).
Source:
Zacks, August 7, 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
“Friendship marks a life even
more deeply than love.”
ELIE WIESEL
T H E W E E K L Y
R I D D L E
Nancy was born in summer, yet
she was born in January. How is this possible?
LAST WEEK’S
RIDDLE: You spend 20% of the money in your wallet. Then you spend 20% of what
remains in your wallet after that. You spend $72.00 total. How much money did
you originally have in your wallet?
ANSWER: $200.
$200 - $40 = $160, then $160 - $32 = $128 with $72 of the original $200 spent.
Troy L Thompson, CFP may be
reached at 515-432-5421 or www.thompsonfinancialinc.com
www.thompsonfinancialinc.com
www.thompsonfinancialinc.com
Know
someone who could use information like this?
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)
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 Treasury Note prior to maturity, it may be worth more or less than the
original 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.
International investments carry additional risks, which
include differences in financial reporting standards, currency exchange rates,
political risks unique to a specific country, foreign taxes and regulations,
and the potential for illiquid markets. These factors may result in greater
share price volatility.
Please consult your financial professional for additional
information.
This content is developed from sources believed to be
providing accurate information. The information in this material is not
intended as tax or legal advice. Please consult legal or tax professionals for
specific information regarding your individual situation. This material was
developed and produced by FMG Suite to provide information on a topic that may
be of interest. FMG is not affiliated with the named representative, financial
professional, Registered Investment Advisor, Broker-Dealer, nor state- or
SEC-registered investment advisory firm. The opinions expressed and material
provided are for general information, and they should not be considered a
solicitation for the purchase or sale of any security.
Copyright 2020 FMG Suite.
CITATIONS:
CHART CITATIONS:
The Wall Street Journal, August 7, 2020
The Wall Street Journal, August 7, 2020
Treasury.gov, August 7, 2020
The Wall Street Journal, August 7, 2020
Treasury.gov, August 7, 2020
No comments:
Post a Comment