September 11, 2020 Weekly Market Update. The tech-heavy Nasdaq fell -3.3% for the week, as the top five stocks took a pause and retreated from past highs; Amazon, Microsoft, Apple, Facebook and Google comprise over one-quarter of the market capitalization of the S&P 500 Index. Meanwhile the S&P 500 dropped -2.3% and the Dow Jones Industrial dropped -1.8% for the week. Normally when market internals deteriorate like this and the leaders begin to abate (last week they started to falter), a correction or prolonged consolidation becomes likely. Indeed, the Nasdaq has moved into correction (minus 10% range) phase and typically these allow new bases to be built in leaders (or new rotational sector leaders) set to continue to lead. Certain investor sentiment factors have also been clouded with a failed Congressional stimulus relief package and Dr. Fauci’s view that covid-19 vaccine may not be available until later than expected (& needed); instead of by October vaccine guidance has been pushed out to the end of year, or early next year. The consumer has nonetheless stayed resilient as evidenced by the Auto and Housing sectors.
September 5, 2020 Weekly Market Update. For the week, tech stocks led the market lower with the Nasdaq losing -3.27% followed by the S&P 500 -2.31% and the Dow Jones Industrial Average -1.82%. After investors have been binge buying tech favorites to excess causing unsustainable valuations with the Fab Five (FB, MSFT, APPL, GOOG & AMZN) it is only natural that the markets let out some steam going into the long holiday weekend. In turn, other companies tied to the economy reopening, experienced an uptick like Carnival Cruises +5% and Macy’s +8%, a sign of some healthy sector rotation in play. The number of first-time unemployment filings decelerated again to for the week of Aug 29 at 950,000, which moved the unemployment needle below 10% for the first time since March. We used the market weakness as an opportunity to buy a newly priced defined outcome ETF which provides 10% targeted downside buffer with uncapped upside of 87%-89% S&P 500 return participation and fully tradable liquidity.