Markets “In a Nutshell” for September 10, 2020
Investment Week at a Glance
Stocks finished down for the week. The Dow Jones Industrial Average was down 1.82%, the S&P 500 fell 2.31%, the New York Stock Exchange Composite (2,000 stocks) fell 1.93% and the average investors index (Value Line Index) was down 2.03%. Foreign stocks (DJ Global ex U.S.) were down 2.00%. Bond prices were higher for the week, with the 10-year U.S. Treasury ending the week 2 basis points lower at 0.72%. (Data source: Wall Street Journal)
Technology Leads Market Lower
After having risen over 35% since the beginning of April, the S&P 500 was down over 2% for the week and looked like the beginning of a much more volatile period for stocks has arrived. Technology was one of the worst performing sectors in the market, especially on Thursday where the tech-heavy Nasdaq Index fell 5%, the worst day for the index since March. There wasn’t any particular reason for the intense fall in stocks, but the fact that the worst performers of the week were the same stocks that have been the best performers for the year shows that the disconnect from the market and the economy may have finally caught up to the high flying stocks. The end of the week, in particular, showed that the impressive momentum in stocks received a stark reminder that prices can’t go up forever and the sources of volatility that were present in March and April are still lingering around. (Barron’s)
Impressive Jobs Data
The U.S. Labor Department reported last Friday that the U.S. added 1.4 million jobs in the month of August and that the unemployment rate fell to 8.4%. While that number is still terribly high and doesn’t include those who are still not looking for work, it shows the labor market is improving at a faster pace than previously anticipated and that companies and workers are both willing to adapt to the new working environment. While the pace of job gains will inevitably slow, the progress made could be instrumental in getting the economy back to where it was at the beginning of 2020 as quickly as possible. As for the negotiations of a fiscal support package that had been put to a halt in early August, progress is starting to pick up with Treasury Secretary Mnuchin reaching out to bridge the gap with Democratic leaders on another package to provide direct payments to households, small business grants and funds to support state and local governments. (Barron’s)
In the market selloff on Thursday, how much did the largest company in the world, Apple, lose in market value in just that one day?
Have a Great Week!
4. Apple lost $180 billion in market value on Thursday (Barron’s).