Markets “In a Nutshell” for September 1, 2020
Investment Week at a Glance
Stocks finished up for the week. The Dow Jones Industrial Average was up 2.59%, the S&P 500 rose 3.26%, the New York Stock Exchange Composite (2,000 stocks) rose 2.83% and the average investors index (Value Line Index) was up 2.93%. Foreign stocks (DJ Global ex U.S.) were up 2.01%. Bond prices were lower for the week, with the 10-year U.S. Treasury ending the week 10 basis points higher at 0.74%. (Data source: Wall Street Journal)
Stocks Continue to Climb Higher
Stocks have relentlessly gone up in the past 3 months and last week was no different, with most stock market indexes up over 2%. The Federal Reserve came out with new guidance on its plan to handle inflation and positioned their outlook to maintain a much lower interest rate environment for the years to come. While this isn’t necessarily a surprise or all that different to the previous decade, it will certainly boost the continued dominance of high growth companies that can take on as much debt as they want to fuel their continued growth. What remains to be seen is whether or not there will be any more government help in the form of fiscal stimulus for state and local governments, small-businesses and individuals. (Barron’s)
Technology Craze Continues
In the never ending saga of what will happen with TikTok, the Chinese social media platform, Walmart has made a surprising entrance into the bidding process by teaming up with Microsoft to try to buy the platform. While it’s not entirely certain why a company like Walmart would make a bid on a social media platform, ever since the U.S. government has mandated that TikTok be sold by September 20, companies have been lining up to try to make a deal that could boost market share, no matter if the combination makes sense or not. In other technology news that doesn’t make 100% sense, Apple and Tesla officially split their shares to lower their share prices in exchange for more shares to their investors. While nothing fundamentally changed about either company, both stocks have soared since the news and the story fits in well with the narrative that certain companies can do no wrong right now. At some point, investors will have to see this trend as unsustainable and the consequences could be dramatic. (Barron’s)
What was the top performing sector in a big week for stocks?
Have a Great Week!
4. Technology led the way for stocks last week, rising 4.63%. (Barron’s).