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][2][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.
THIS WEEK: 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.
THIS WEEK: 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.
Investing involves risk including the potential loss of principal. No investment strategy can
guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political
instability and may not be suitable for all investors.
The Standard & Poor's 500
(S&P 500) is an unmanaged group of securities considered to be representative of the stock
market in general.
The Dow Jones Industrial Average is a price-weighted average of 30
significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by
Charles Dow back in 1896.
The 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 stocks of technology companies and growth companies.
The MSCI EAFE Index
was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the
performance in major international equity markets as represented by 21 major MSCI indices from
Europe, Australia, and Southeast Asia.
The 10-year Treasury Note represents debt owed by
the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower,
investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Opinions expressed are subject to change without notice and are not intended as investment advice or
to predict future performance.
Past performance does not guarantee future
results.
You cannot invest directly in an index.
Consult your financial
professional before making any investment decision.
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.
These
are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named
representative, Broker dealer or Investment Advisor and should not be construed as investment
advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax
or legal advice. All information is believed to be from reliable sources; however, we make no
representation as to its completeness or accuracy. Please consult your financial professional for
further information.
The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. 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.
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The Wall Street Journal, August 7, 2020
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The Wall Street Journal, August 7, 2020
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The Wall Street Journal, August 7, 2020
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MarketWatch.com, August 4, 2020
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The Wall Street Journal, August 6, 2020
-
CNBC, August 6, 2020
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The Wall Street Journal, August 7, 2020
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MarketWatch, August 4, 2020
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The Wall Street Journal, August 5, 2020
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CNBC.com, August 4, 2020