Markets “In a Nutshell” for July 14, 2020
Investment Week at a Glance
Stocks finished mostly up for the week. The Dow Jones Industrial Average was up 0.96%, the S&P 500 rose 1.76%, the New York Stock Exchange Composite (2,000 stocks) rose 0.70% and the average investors index (Value Line Index) was down 0.39%. Foreign stocks (DJ Global ex U.S.) were up 1.19%. Bond prices were higher for the week, with the 10-year U.S. Treasury ending the week 3 basis points lower at 0.65%. (Data source: Wall Street Journal)
Tech Leads the Week
While the Dow Jones Industrial Average and S&P 500 each had impressive weeks, rising 1% and 1.8% respectively, the tech heavy Nasdaq Index is what drove the U.S. stock market higher this week with a massive 4% rise. Economic data for the week was generally positive for the week with manufacturing data for the U.S. beginning to look more positive and 1 million fewer people reported receiving continuing jobless claims. The recent spike in COVID-19 cases has spooked markets in recent weeks and has forced some states to pause and even roll back their reopening plans. Overall, last week was just another reminder that the issues and uncertainties caused by the outbreak and subsequent shutdown are here to stay for the foreseeable future. (Barron’s)
China Tensions Cause Market Jitters
Renewed fears of an amplified confrontation with China caused isolated market drops this week as investors become wary of a falling out of the deescalated relationship that developed at the end of 2019 and early 2020. After China recently passed a security law that has tightened its government’s control of Hong Kong, tech companies Google, Facebook and Twitter, all part of the tech sector that has driven the market higher this week, said they would end compliance with Chinese government user data requests and risk government retaliation. In relation to the trade deal, reports also came out that China has only bought $2 billion worth of U.S. energy, deeply behind schedule on the $25 billion that was agreed to in the trade deal signed earlier this year. In a deeply uncertain election year, China policy will certainly be a hot topic and will be another contributing factor in a year that has been one of the most volatile in a decade. (Barron’s)
With California, Texas, Arizona and Florida pausing or rolling back their reopening plans, how much U.S. economic output is attributable to these states?
Have a Great Week!
c. 30% of U.S. economic output is attributable to those 4 states that have paused or rolled back their reopening plans (Barron’s).