In this week’s recap: stocks have a mixed reaction to
earnings, economic data, and a potential stimulus.
Weekly Economic Update
THE WEEK ON WALL STREET
Stocks
were mixed last week amid a busy week of earnings, some troubling economic
data, and seemingly little progress on a new fiscal stimulus package.
The
Dow Jones Industrial Average slipped 0.16%, while the Standard & Poor’s 500
increased by 1.73%. The Nasdaq Composite Index surged 3.69% for the week. The
MSCI EAFE Index, which tracks developed stock markets overseas, dipped 0.75%.1,2,3
Stocks Buffeted by
Crosswinds
Stocks
rode a roller coaster last week, reacting to a conflicting stream of corporate
events and economic data.
Investors
were optimistic on Monday about the ability of mega-cap technology companies to
thrive in an uncertain economy, but worried on Tuesday about pending
Congressional testimony involving the CEOs of these firms.
On
the economic front, a strong June durable goods orders report on Monday
bolstered investor sentiment. But the optimism faded on a disappointing jobless
claims number and a troubling second-quarter GDP number that – while
anticipated – was a bit unsettling.4,5,6
Following
some exceptional earnings results from the mega-cap technology companies,
stocks managed to rally in the final hour of trading on Friday.
U.S. Dollar Continues Its
Decline
Since
peaking in mid-March, the U.S. dollar has dropped nearly 9%. Some of the
potential beneficiaries of a weak dollar are global American businesses whose
products and services become less expensive in overseas markets.7
Conversely,
international companies may suffer lower sales in the U.S. as their products
become more expensive. It’s a mixed bag of potential outcomes, but Wall Street
has become more and more focused on the dollar’s trajectory.
Final Thoughts
August
has historically been a particularly volatile month. For instance, in 2019, the
S&P 500 posted moves of more than one percent in 22 trading days.8
One
of the possible reasons is that many traders are away on vacation, resulting in
light volume, which may amplify market volatility. But this year, it’s
uncertain whether traders will be away on vacation due to the pandemic. Should
markets become volatile in the weeks ahead, investors may want to remind
themselves of the seasonal trends that may be at work.
T I P O
F T H E W E E K
If your life or financial situation changed notably this year (a new job, a marriage, an addition to the family), then now should be a time to review the state of your personal insurance and your risk management approach.
THE WEEK AHEAD: KEY ECONOMIC DATA
Monday: Purchasing Managers Index (PMI)
Manufacturing Index. Institute for Supply Management (ISM) Manufacturing Index.
Wednesday: Automated Data Processing (ADP)
Employment Report. Purchasing Managers Index (PMI) Services Index. Institute
for Supply Management (ISM) Non-Manufacturing Index.
Thursday: Jobless Claims.
Friday: Employment Situation Report.
Source:
Econoday, July 31, 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: The Clorox Company (CLX), American
International Group (AIG).
Tuesday: The Walt Disney Company (DIS),
Twilio (TWLO), Prudential Financial (PRU), Emerson Electric (EMR).
Wednesday: CVS Health (CVS), Humana (HUM),
Regeneron Pharmaceuticals (REGN), Wayfair (W).
Thursday: Bristol Myers Squibb (BMY), Booking
Holdings (BKNG), Becton Dickinson (BDX), T-Mobile (TMUS).
Source:
Zacks, July 31, 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
“Live in such a way that you would not be
ashamed to sell your parrot to the town gossip.”
WILL
ROGERS
T H E W E E
K L Y R I D D L E
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?
LAST
WEEK’S RIDDLE: How many 9s are in the range of numbers from 1 to 100?
(Remember, the number 99 has two 9s in it.)
ANSWER:
20, counting 99, which has 2 nines in it.
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.
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CITATIONS:
CHART CITATIONS:
The Wall Street Journal, July
31, 2020
The Wall Street Journal, July 31, 2020
treasury.gov, July 31, 2020
The Wall Street Journal, July 31, 2020
treasury.gov, July 31, 2020
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