Markets “In a Nutshell” for July 1, 2020
Investment Week at a Glance
Stocks finished down for the week. The Dow Jones Industrial Average was down 3.31%, the S&P 500 fell 2.86%, the New York Stock Exchange Composite (2,000 stocks) fell 3.14% and the average investors index (Value Line Index) was down 4.13%. Foreign stocks (DJ Global ex U.S.) were down 1.09%. Bond prices were higher for the week, with the 10-year U.S. Treasury ending the week 6 basis points lower at 0.64%. (Data source: Wall Street Journal)
Mixed Data and Rising Cases
Stocks fell abruptly around the world following signs of a slower recovery than previously expected and sharply higher cases amongst states mostly located in the south. Trade made its way back into the news cycle this week with uncertainty regarding the follow through of the China trade deal struck back in January, as well as new threats to impose tariffs on European goods. The International Monetary Fund also came out with a more pessimistic outlook for the global economy than expected and signaled that it could take years before output is back to normal. While none of the news this week was necessarily shocking, it was another reminder that markets today remain much more volatile than normal, regardless of how much stocks have recovered, and any reaction to news is going to have an outsize impact. (Barron’s)
Reopening Progress Paused
With COVID-19 cases continuing to rise nationwide and specifically spiking in some southern states, like Florida, Texas and Arizona, some of the harder hit states are showing more caution in reopening the shut down parts of their economies. While none of those states has signaled they will return to a shutdown similar to the first one, the rise in cases is showing that government management of the virus may last all summer and consumer spending and unemployment may be severely affected by it. If there still are worries of the virus spreading past July, Congress will surely need to step in and find a way to continue supporting the economy and building a bridge financially for people to a time where the economy is able to run on its own without any health concerns. (Barron’s)
In a tough week for stocks, what was the worst performing industry in the Dow Jones last week?
Have a Great Week!