Investment Insights I Market Outlook & Investment News
June 27, 2020 Weekly Market Update. Led by big banks, the markets sold off Friday after the Federal Reserve said in its stress test results that it would restrict dividends and share buybacks on financial companies for the third quarter. The Fed stated the action was to “ensure large banks remain resilient despite the economic uncertainty from the coronavirus event.” Hence, all U.S. major equity indices gave back several weeks of gains as the Dow Jones Industrial Average lost -3.31% followed by the S&P 500 Index declining -2.86%. On the technology front, social media stocks including Facebook, Instagram and Twitter also came under pressure due to their policies on censorship. Other market jitters related to Thursday’s new case tally surpassed 40,000 for the first time. States reporting record new cases include Florida, California, Arizona and Texas. Nearly 1.5 million workers filed new state claims of unemployment last week which was higher the expectations. Given the disconcerting news there should have been no surprise when consumer sentiment slipped to 78.1 in the final June reading, down from the 78.9 reported earlier in the month. Consensus economists expected a reading of 79.2; the index of consumer sentiment reached a high of 99.3 back at year-end 2019.
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