July 25, 2020 Weekly Market Update. For the first time since the month of May, the Nasdaq reporting its 2nd weekly loss by dropping -1.33%; the Dow Jones declined -0.76% while the S&P 500 stayed largely flat at +0.28%. Jobless claims came in at 1.4 million for the week ending July 18, exceeding expectations; this was the 18th straight week in which initial claims totaled more than 1 million. Meanwhile time is almost running out to keep or partially replace the extra $600 weekly unemployment as the Senate Republicans and the White House remain at odds with the House on a new Covid-19 relief bill. The S&P 500 has reported a decline in earnings of -42.4% for Q2, which would be the largest earnings decline reported by the index since Q4 2008 (-69.1%).
July 18, 2020 Weekly Market Update. Dow Jones Industrial Average gained +2.29%, and S&P 500 rose +1.25% while the Nasdaq lost -1.08% on the week. According to Factset Research: “To date, 9% of the companies in the S&P 500 have reported actual results for Q2 2020. In terms of earnings, the percentage of companies reporting actual EPS above estimates (73%) is above the five-year average. The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings decline for the second quarter is -44.0% on a blended revenue decline for the second quarter is -10.5%. Looking ahead, analysts predict a (year-over-year) decline in earnings in the third quarter (-24.4%) and the fourth quarter (-12.4%) of 2020.” Meanwhile on the COVID-19 front, the U.S. has now become the worst-affected country in the world with more than 3.6 million diagnosed cases and at least 139,175 deaths. Until a vaccine emerges, the virus will likely continue to spread unless social distancing (with masks) is maintained. The U.S. House recently approved another COVID-19 relief bill—a whopping $3 trillion in assistance to citizens and businesses beyond the first infusion of $2 trillion in March (other countries have passed similar packages).
July 3, 2020 Weekly Market Update. The S&P 500 Index gained +1.76%, Dow Jones Industrial Average rose +0.96% and a slight loss for the Russell 2000 -0.64% on the week. The S&P 500’s returns continue to be propelled and dominated by tech leaders such as Amazon, Apple and Microsoft. The Federal Reserve and government stimulus programs continue to provide market momentum in the throws of grim news where coronavirus cases are resurging in many U.S. states – with some states once again pressing the pause button on certain business sector operations. Meanwhile, many mainstream retailers and restaurants are either closing shop or cutting stores – for example, J Crew, Neiman Marcus, Brooks Brothers and Chuck E Cheese all recently filed for bankruptcy while the likes of Dunkin' Donuts and Starbucks have closed over 400 stores (leading to permanent jobs losses).
July 3, 2020 Weekly Market Update. Equity markets rallied on news that June non-farm payrolls surged 4.8 million, surpassing estimates of 3.06 million. For the week, the Nasdaq outperformed at +4.62% followed by the S&P 500 Index +4.02% and the Dow Jones Industrial Average +3.25%. However, June’s “real” unemployment rate was 18%; a figure that is almost as bad as the 25% rate during the Great Depression. The U-6, or real unemployment rate, includes the underemployed, the marginally attached, and discouraged workers. Markets are cherry picking news and celebrating selective positive economic data while turning a blind eye to worrying surge of coronavirus cases. Of course, stocks have been fueled by large amounts of excess QE money that has been finding its way into the capital markets. However, this excess QE that the Fed has created has started to decline with the Fed’s balance sheet dropping by $86 billion these past couple weeks. Markets also continue to disregard escalating trade tensions between the U.S. and China.
July 18, 2020 Weekly Market Update. Dow Jones Industrial Average gained +2.29%, and S&P 500 rose +1.25% while the Nasdaq lost -1.08% on the week. According to Factset Research: “To date, 9% of the companies in the S&P 500 have reported actual results for Q2 2020. In terms of earnings, the percentage of companies reporting actual EPS above estimates (73%) is above the five-year average. The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings decline for the second quarter is -44.0% on a blended revenue decline for the second quarter is -10.5%. Looking ahead, analysts predict a (year-over-year) decline in earnings in the third quarter (-24.4%) and the fourth quarter (-12.4%) of 2020.” Meanwhile on the COVID-19 front, the U.S. has now become the worst-affected country in the world with more than 3.6 million diagnosed cases and at least 139,175 deaths. Until a vaccine emerges, the virus will likely continue to spread unless social distancing (with masks) is maintained. The U.S. House recently approved another COVID-19 relief bill—a whopping $3 trillion in assistance to citizens and businesses beyond the first infusion of $2 trillion in March (other countries have passed similar packages).
July 3, 2020 Weekly Market Update. The S&P 500 Index gained +1.76%, Dow Jones Industrial Average rose +0.96% and a slight loss for the Russell 2000 -0.64% on the week. The S&P 500’s returns continue to be propelled and dominated by tech leaders such as Amazon, Apple and Microsoft. The Federal Reserve and government stimulus programs continue to provide market momentum in the throws of grim news where coronavirus cases are resurging in many U.S. states – with some states once again pressing the pause button on certain business sector operations. Meanwhile, many mainstream retailers and restaurants are either closing shop or cutting stores – for example, J Crew, Neiman Marcus, Brooks Brothers and Chuck E Cheese all recently filed for bankruptcy while the likes of Dunkin' Donuts and Starbucks have closed over 400 stores (leading to permanent jobs losses).
July 3, 2020 Weekly Market Update. Equity markets rallied on news that June non-farm payrolls surged 4.8 million, surpassing estimates of 3.06 million. For the week, the Nasdaq outperformed at +4.62% followed by the S&P 500 Index +4.02% and the Dow Jones Industrial Average +3.25%. However, June’s “real” unemployment rate was 18%; a figure that is almost as bad as the 25% rate during the Great Depression. The U-6, or real unemployment rate, includes the underemployed, the marginally attached, and discouraged workers. Markets are cherry picking news and celebrating selective positive economic data while turning a blind eye to worrying surge of coronavirus cases. Of course, stocks have been fueled by large amounts of excess QE money that has been finding its way into the capital markets. However, this excess QE that the Fed has created has started to decline with the Fed’s balance sheet dropping by $86 billion these past couple weeks. Markets also continue to disregard escalating trade tensions between the U.S. and China.