Markets “In a Nutshell” for October 20, 2020
Investment Week at a Glance
Stocks finished mixed for the week. The Dow Jones Industrial Average was up 0.07%, the S&P 500 rose 0.19%, the New York Stock Exchange Composite (2,000 stocks) fell 0.63% and the average investors index (Value Line Index) was down 0.18%. Foreign stocks (DJ Global ex U.S.) were down 1.04%. Bond prices were higher for the week, with the 10-year U.S. Treasury ending the week 3 basis points lower at 0.76%. (Data source: Wall Street Journal)
Markets Indecisive for the Week
Markets ended the week essentially where they started, with technology stocks largely up for the week, while the rest of the market was either unchanged or slightly down. 3rd Quarter earnings reports began to come in last week with the big banks reporting results that slightly beat expectations, but their stock prices still fell for the week, as the ongoing disruptions of the COVID-19 crisis continue to persist. Cases continued to rise in the U.S., with the Midwest region rising the fastest, along with Europe, where governments have actually begun to implement restrictions and lockdowns similar to those of March through May. While markets in the U.S. currently aren’t pricing in another similar lockdown in the U.S., the current labor market continues to be the biggest drag on the economy, with persistently high initial unemployment filings darkening the picture of the economic rebound. As long as the pace of people filing for unemployment for the first time continues, the economy will never be able to fully get on track to a complete and sustainable recovery. (Barron’s)
Stocks Continue to Hold Up
Despite two COVID-19 vaccine trials that had to be paused for safety reasons, an unexpected rise in initial unemployment claims and a still contentious and increasingly uncertain presidential election, stocks, especially in the U.S., have continued to hold their own weight so far in the month of October. While stocks as a whole ended the week unchanged, individual sectors’ performance shows that there is some level of positioning by investors to take advantage of a recovering economy, by investing in Energy or Industrial stocks, or a “lower for longer” interest rate environment, where technology stocks will continue to soar. Both sectors had their moments last week, but with an increasingly uncertain market, for all the reasons listed above, there has been no clear choice as the outperformer for the next year to come. (Barron’s)
What have been the estimated financial and health care costs associated with the COVID-19 crisis, according to a study conducted by Harvard’s David Cutler and Lawrence Summers?
Have a Great Week!
4. The financial and health care costs associated with the COVID-19 crisis are estimated to be $16 trillion. (Barron’s).