The Week on Wall Street
Stocks slipped in the final days of trading last week
on higher jobless claims and rising tensions in the U.S.-China relationship.
The Dow Jones Industrial Average lost 0.76%, while the Standard & Poor's 500 dipped 0.28%. The Nasdaq Composite Index dropped 1.33% for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, rose 1.24%.[1][2][3]
Stocks Lose Momentum
Stocks marched higher to begin the week on progress with a
COVID-19 vaccine and a string of upbeat corporate quarterly reports. Firming oil prices and the
passage of a fiscal stimulus bill by the European Union also helped buoy investors'
spirits.
Market sentiment, however, turned negative after Thursday morning's report of an
uptick in new unemployment claims, which suggested a possible slowdown in hiring. The market was led
lower by the technology sector ahead of quarterly reports from some of the sector's biggest
names.[4]
U.S.-China Tensions Escalate
Tensions escalated
last week as the U.S. ordered China to close its consulate in Houston, which the White House claimed
was stealing American information. A day earlier, the U.S. had accused China of attempting to steal
COVID-19 research data. China responded by ordering the U.S. to close its consulate in the city of
Chengdu.[5][6]
The markets appear more focused on the apparent deteriorating
relations between the two nations, worried about a repeat of the trade battle in 2018. Whether the
rancor is managed is likely to remain a top concern for investors in the weeks
ahead.
Final Thoughts
The mega-cap technology companies' market
dominance is a concern to some. Last week it was reported that six of these mega-cap stocks represent
41% of the Nasdaq market capitalization.Five mega-cap names included in the S&P 500 Index account
for 22% of that index's market capitalization.[7]
Investors have embraced these
firms because they appear to be able to show solid financial performance in the midst of an economy
coping with COVID-19.
THIS WEEK: KEY ECONOMIC
DATA
Monday: Durable Goods Orders.
Wednesday:
Federal Open Market Committee (FOMC) Meeting Announcement.
Thursday: Gross
Domestic Product (GDP), Jobless Claims.
Friday: Consumer
Sentiment.
Source: Econoday, July 24, 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
Tuesday: Advanced Micro Devices (AMD), Visa (V), Pfizer
(PFE), McDonalds (MCD), 3M Company (MMM), eBay (EBAY), D.R. Horton
(DHI).
Wednesday: Facebook (FB), Boeing (BA), Qualcomm (QCOM), PayPal (PYPL),
General Motors (GM), Shopify (SHOP), Teladoc Health (TDOC).
Thursday: Apple
(AAPL), Ford (F), Alphabet (GOOGL), Mastercard (MA), Procter & Gamble (PG), Eli Lilly (LLY),
United Parcel Service (UPS).
Friday: AbbVie (ABBV), Exxon Mobil (XOM),
Caterpillar (CAT), Merck (MRK), Chevron (CVX).
Source: Zacks, July 24,
2020
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The Wall Street Journal, July 24, 2020
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The Wall Street Journal, July 24, 2020
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The Wall Street Journal, July 24, 2020
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NYTimes.com, July 23, 2020
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CBSnews.com, July 22, 2020
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APNews.com, July 24, 2020
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CNBC, July 22, 2020