The Week on Wall Street
Investor sentiment turned negative last week, amid an
increasing number of COVID-19 cases in states where reopening has been underway as well as a subdued
economic forecast from the Federal Reserve.
The Dow Jones Industrial Average dropped
5.55%, while the Standard & Poor's 500 lost 4.78%. The Nasdaq Composite Index slipped 2.30% for
the week. The MSCI EAFE Index, which tracks developed stock markets overseas, fell
3.10%.[1][2][3]
Reality Bites
The optimism that drove stock prices higher these past several
weeks slipped away on reports of a jump in COVID-19 cases, which sparked worries of a second wave
slowing the economic recovery. A sober forecast for the economy by the Federal Reserve further
dampened investor sentiment.
The week started upbeat with "reopening" stocks, e.g.,
financials, transportation, retailers, travel and leisure, and industrials, leading the way higher.
But the momentum was soon lost as stocks turned mixed on Tuesday and Wednesday and then moved
decidedly downward, with the S&P 500 losing 5.9% on Thursday.[4]
Amid a
volatile week, big technology companies resumed their market leadership, with the NASDAQ Composite
closing above 10,000 for the first time. Stocks pared their losses on Friday, but it wasn't
enough.[5]
Fed Forecasts Economic Growth and Interest
Rates
On Wednesday, the Federal Reserve said that it would keep the federal funds rate
near zero and maintain its monthly purchases of Treasury bonds and mortgage-backed securities.
The Fed also issued its forecasts for 2020-2022, indicating that it saw its benchmark
federal funds rate remaining at zero, with inflation at 0.8% for 2020, increasing to 1.6% in 2021,
then to 1.7% in 2022. Fed officials also expect the economy to shrink by 6.5% this year, with Gross
Domestic Product growing 5% and 3.5% in 2021 and 2022, respectively. Their forecast for unemployment
predicts a steady decline over the next 2½ years, from 9.3% by the end of 2020 to 5.5% in
2022.[6]
THIS WEEK: KEY ECONOMIC
DATA
Tuesday: Retail Sales. Industrial
Production.
Wednesday: Housing Starts.
Thursday: Jobless
Claims. Index of Leading Economic Indicators.
Source: Econoday, June 12,
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: Oracle
(ORCL), Lennar (LEN).
Thursday: Kroger (KR).
Source: Zacks, June
12, 2020
Companies mentioned are for informational purposes only. It should not be
considered a solicitation for the purchase or sale of the securities. Any investment should be
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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
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The Standard & Poor's 500
(S&P 500) is an unmanaged group of securities considered to be representative of the stock
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The Dow Jones Industrial Average is a price-weighted average of 30
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The Nasdaq Composite is an index of the common stocks and
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performance of stocks of technology companies and growth companies.
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was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the
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The Wall Street Journal, June 12, 2020
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The Wall Street Journal, June 12, 2020
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The Wall Street Journal, June 12, 2020
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The Wall Street Journal, June 11, 2020
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CNBC, June 12, 2020
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CNBC, June 10, 2020