In Markets "In a Nutshell"

Markets “In a Nutshell” for July 7, 2020

Investment Week at a Glance

Stocks finished up for the week.  The Dow Jones Industrial Average was up 3.25%, the S&P 500 rose 4.02%, the New York Stock Exchange Composite (2,000 stocks) rose 3.34% and the average investors index (Value Line Index) was up 3.82%.  Foreign stocks (DJ Global ex U.S.) were up 2.03%.  Bond prices were lower for the week, with the 10-year U.S. Treasury ending the week 4 basis points higher at 0.68%.  (Data source: Wall Street Journal)

Recap of 2nd Quarter

The 2nd Quarter ended last week and produced the best S&P 500 quarterly performance since 1998, rising more than 20% since the end of March. The rally was largely fueled by aggressive government responses from the Federal Reserve and Congress, but also showed some early signs of a recovery in consumer spending. With a continuation of a recovery in the economy still contingent on a containment and development of a vaccine for COVID-19, the S&P 500 has already gotten within almost 2% of where it started the year. While the immense risks that have caused many investors to remain cautious still remain quite possible, the signs of improvement and support from governments globally have created a sense of optimism in financial markets heading into the 3rd Quarter. (Wall Street Journal)

Positive Signs in Jobs Report

The jobs report for June was released last Thursday and showed that the U.S. gained back almost 5 million jobs and brought the unemployment rate down to almost 11%. With the difficulty in determining who is out of work temporarily due to the lockdown or permanently due to the recession, it is still incredibly unclear how quick the recovery in jobs will be, but the trend in the past two months has been positive. What worries many economists today is the continuation of record high initial jobless claims every week and a stagnating continuing jobless claims of about 19 million people. Congress has a long list of items to address in the month of July, especially in regards to unemployment payments, the Paycheck Protection Program and any further stimulus to individuals and businesses. While the stock market continues to reflect an improving economy from the lows in March, much is still at stake in order to get back to growth. (Wall Street Journal)

Quiz:

What was the best performing sector in the S&P 500 for the 2nd Quarter?

  1.   Consumer Discretionary
  2.   Energy
  3.   Health Care
  4.   Information Technology

 

 

 

 

 

 

Answer below.

 

 

 

 

Have a Great Week!

 

 

 

 

 

 

 

 

 

 

Answer:

  1.   The Consumer Discretionary rose 32.6% in the 3 months ending in June, the sector’s best quarterly performance ever.  (Barron’s).