U.S. STOCK MARKETS HAVE BIG WEEK AS NASDAQ REACHES ANOTHER NEW HIGH AND THE S&P 500 IS WITHIN 2% OF ITS FEBRUARY HIGH
|Weekly Market Performance
*Source: Bonds represented by the Bloomberg Barclays US Aggregate Bond TR USD. This chart is for illustrative purposes only and does not represent the performance of any specific security. Past performance cannot guarantee future results.
|New Highs for NASDAQ and Real Close for S&P 500
It was a good week for U.S. stock markets as the large tech names pushed NASDAQ to new highs and the S&P 500 is now less than 2% from its February peak. The smaller–cap Russell 2000 had a huge week, eating into its YTD losses significantly.
The week was driven by the mega-caps and the technology names as economic data from the previous month continued to pour in, including more bad news on the employment front, mixed news about construction spending and positive manufacturing data. Two of the three main media topics on the week – the 2020 presidential election and social unrest appeared to have very little impact on Wall Street whereas the third COVID–19 – did seem to influence markets in a positive way.
The news surrounding COVID–19 was twofold: more positive news about a potential vaccine and hopes that another U.S. government relief package was close, although it does appear that the two sides are fairly far apart.
As was the case last week, the FAAMG names – Facebook, Apple, Amazon, Microsoft and Google continued pushing the markets to new highs.
There was some tension in the air on Wall Street as the U.S. and China are once again not getting along well, underscored by news that the U.S. has sanctioned Hong Kong Leader Carrie Lam and after President Trump said he would ban TikTok unless it was under new ownership within 45 days.
|Construction Spending Mixed
The U.S. Census Bureau announced Construction Spending for June 2020 on Monday, August 3rd.
Total Construction Spending:
|Employment Situation Report
The Employment Situation Report was greeted with cautious optimism given the less–than–optimistic ADP Employment Change report from just a few days ago that said 167,000 jobs were added to private–sector payrolls.
On Friday, the Department of Labor reported that nonfarm payroll employment rose by 1.8 million in July and the unemploymentrate fell to 10.2%. In Friday\’s press release, the DOL said that:
“These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID–19) pandemic and efforts to contain it. In July, notable job gains occurred in leisure and hospitality, government, retail trade, professional and business services, other services, and health care.”
Here are a few more data points released by the DOL:
|Earnings Season Wrapping Up with Surprises
Close to 90% of S&P 500 companies have reported earnings results for the second quarter and research firm FactSet announced a few interesting statistics on Friday, including that: