Markets “In a Nutshell” for October 6, 2020
Investment Week at a Glance
Stocks finished up for the week. The Dow Jones Industrial Average was up 1.87%, the S&P 500 rose 1.51 %, the New York Stock Exchange Composite (2,000 stocks) rose 2.12% and the average investors index (Value Line Index) was up 3.48%. Foreign stocks (DJ Global ex U.S.) were up 1.63%. Bond prices were lower for the week, with the 10-year U.S. Treasury ending the week 4 basis points higher at 0.70%. (Data source: Wall Street Journal)
Stocks Rise in Tumultuous Week
Stocks rose broadly last week despite a wave of political news, from a highly contentious presidential debate to the positive COVID-19 test for President Trump and others in the White House, that contributed to volatility in the market, but couldn’t knock stocks off a convincingly positive performance. Economic data wasn’t too impressive either, with the jobs report for the month of September showing continued progress with a gain of almost 700 thousand jobs for the month, but also reported a relatively large percentage drop in the participation rate, which measures how many people are actively looking for jobs. While the economy won’t be able to fully recover until all states are comfortable enough to open back up their economies, the sooner these jobs begin to come back to the economy, the faster the economic scars of the pandemic can be healed. (Barron’s)
3rd Quarter Ends
The 3rd Quarter of 2020 ended for financial markets last week with the end of September and it was a quarter that provided the hopeful beginning of an economic recovery, along with more clarity on the challenges the economy faces in the succeeding quarters. As for stocks, the best performing sector in the S&P 500 was the Consumer Discretionary sector, an encouraging indicator that consumer spending is picking back up. The worst performing sector was the Energy sector, which was down an additional 18.8% in the 3rd Quarter, and has continued what has been a terrible year so far, down over 49%. The unemployment rate has come down considerably, ending September at 7.9%, which has beaten economists’ expectations that were forecasted in the beginning of the quarter, but persistently high unemployment claims and a falling participation rate show that much still has to be done to bring the economy back. (Barron’s)
Through mid-September, how many applications were filed to start new businesses that were expected to employ multiple workers?
Have a Great Week!
2. 1.1 million applications were filed through mid-September to start new businesses that were expected to hire multiple employees, the highest number since 2007 (Barron’s).