In this week’s recap: Stocks power higher, while the Dow
makes a few changes.
Weekly Economic Update
THE WEEK
ON WALL STREET
Stocks
advanced relentlessly last week on positive COVID-19 developments, encouraging
economic data, and a supportive policy shift in the Fed’s approach to its
target inflation rate.
The
Dow Jones Industrial Average increased by 2.59%, while the Standard &
Poor’s 500 jumped 3.26%. The Nasdaq Composite index leaped 3.39% for the week.
The MSCI EAFE index, which tracks developed overseas stock markets, rose 1.19%.1-3
Stocks
Power Higher
Investors
pushed stock prices higher all week as hopeful news came with each new day, from
the announcement of a potential treatment for COVID-19 to news that U.S. and
China negotiators had met by videoconference. Despite another high new jobless
claims number, other economic data released during the week indicated a
continuing economic recovery, further supporting investor enthusiasm for
stocks.4
The
Fed’s announcement of a shift in its inflation policy, which suggested that
rates are likely to remain low for a long time, helped push the market higher.
The momentum carried over into Friday, leaving the S&P 500 and NASDAQ
Composite at new record highs and the Dow Jones in positive year-to-date
territory.5
Changes
in the Dow Industrials
It
was announced last week that the Dow Jones Industrial Average will be
undergoing some changes. Starting Monday, August 31, Salesforce.com, Amgen, and
Honeywell International will be added to the 30 stocks in the Dow Industrials
and Exxon Mobil, Pfizer, and Raytheon Technologies will be removed.6
In
part, these changes were prompted by Dow-component Apple, which plans a
four-to-one stock split on Monday, August 31. The Dow Jones Industrial Average
is a price-weighted index, and Apple’s split reduces the impact of technology
on the index. The new changes are an attempt to mitigate that issue.7
T I P O F
T H E W E E K
Establish a timeline for your financial goals. List what you want to achieve and when, and review your progress and the deadlines you have set semi-annually or annually.
THE WEEK
AHEAD: KEY ECONOMIC DATA
Tuesday: ISM (Institute of Supply Management) Manufacturing
Index.
Wednesday: ADP (Automated Data Processing) Employment Report.
Factory Orders.
Thursday: Jobless Claims. ISM (Institute of Supply
Management) Services Index.
Friday: Employment Situation Report.
Source:
Econoday, August 28, 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: Zoom Video (ZM).
Wednesday: Macy’s (M), Cloudera, Inc. (CLDR), Mongodb (MDB),
Crowdstrike Holdings (CRWD).
Thursday: Broadcom (AVGO), Docusign (DOCU).
Source:
Zacks, August 28, 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
“Wisdom is found only in
truth.”
JOHANN WOLFGANG
VON GOETHE
T H E W E E K L Y
R I D D L E
There is a kind of sweet bean
that never grows in a garden. What is it?
LAST WEEK’S
RIDDLE: A man jumped out of a small plane without a parachute. When he hit the
ground, he wasn’t injured at all. Why?
ANSWER: The
plane was parked on the ground.
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 28, 2020
The Wall Street Journal, August 28, 2020
treasury.gov, August 28, 2020
The Wall Street Journal, August 28, 2020
treasury.gov, August 28, 2020
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