In this week’s recap: Stocks reached new highs, erasing
steep losses from February and March.
Weekly Economic Update
THE WEEK
ON WALL STREET
Stocks
powered to another week of gains as the S&P 500 and Nasdaq Composite set
multiple new record highs along the way.
The
Dow Jones Industrial Average was essentially unchanged while the Standard &
Poor’s 500 rose by 0.72%. The Nasdaq Composite index added 2.65% for the week.
The MSCI EAFE index, which tracks developed overseas stock markets, slipped
0.71%.1,2,3
The S&P 500 Sets Record High
The
S&P 500 closed at a record high on Tuesday, erasing the steep losses
suffered in February and March. The recovery has been powered by unprecedented
monetary accommodation, fiscal stimulus, and investor willingness to look ahead
with confidence that global economies will get past the pandemic challenge.
Technology stocks continued to lead the market and helped push the NASDAQ
Composite to new highs.4
Stocks
were mixed as the week progressed amid some weak economic news, a message of
economic caution from the Fed, and continuing uncertainty over a new fiscal
stimulus plan. Technology momentum provided support for the broader market,
with a late Friday afternoon rally pushing the S&P 500 and Nasdaq Composite
to close out the week at fresh record highs.5
Not All
Sectors Are Participating
Behind
last Tuesday’s headline that the S&P 500 had set a new record high lies a
story of a deeply bifurcated market.
Despite
a new high, more than half the companies in the index were still trading below
where they began the year. When dissected on an industry sector basis, the
year-to-date performance dispersion was quite wide, with sectors like
Technology (+25.53%), Consumer Discretionary (+16.68%), and Communication
Services (+12.70%) posting strong performance, while Energy (-37.56%) and
Financials (-20.08%) remained sharply down. In fact, nearly half (5 out of 11)
of S&P 500 sectors were still in negative territory year-to-date.6,7,8
T I P O F
T H E W E E K
Students who want to enter college this fall should complete the FAFSA early in the year to increase eligibility for student aid. After completing it, they should apply for scholarships as soon as possible.
THE WEEK
AHEAD: KEY ECONOMIC DATA
Tuesday: Consumer Confidence. New Home Sales.
Wednesday: Durable Goods Orders.
Thursday: Jobless Claims. Gross Domestic Product (GDP).
Friday: Consumer Sentiment.
Source:
Econoday, August 21, 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: Salesforce.com (CRM), Best Buy (BBY), Intuit (INTU).
Thursday: Marvell Technology (MRVL), Dollar General (DG),
Dollar Tree (DLTR), Dell Technologies (DELL), VMware (VMW).
Source:
Zacks, August 21, 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
“Employ thy time well, if
thou meanest to get leisure.”
BENJAMIN
FRANKLIN
T H E W E E K L Y
R I D D L E
A man jumped out of a small
plane without a parachute. When he hit the ground, he wasn’t injured at all.
Why?
LAST WEEK’S
RIDDLE: What number should be next in this series: 9, 16, 25, 36?
ANSWER: 49, as
49 = 7 squared. 9 = 3 squared, 16 = 4 squared, and so on.
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 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
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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 21, 2020
The Wall Street Journal, August 21, 2020
treasury.gov, August 21, 2020
The Wall Street Journal, August 21, 2020
treasury.gov, August 21, 2020
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