THE WEEK ON WALL STREET
Stocks were mixed last week as worries that stretched from Washington D.C., where prospects of a new fiscal stimulus bill dimmed, to Europe, which saw an increase of new COVID-19 cases.
The Dow Jones Industrial Average declined 1.75%, while the Standard & Poor's 500 fell 0.63%. The Nasdaq Composite index gained 1.11% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slumped 4.20%.
Late Friday Rally Pares Losses
Dwindling chances of a federal fiscal stimulus, pre-election jitters, and worries over a second wave of coronavirus infections in Europe weighed heavily on investors.
The weakness in technology persisted. The Department of Justice proposal to curb legal protections for internet companies and require them to take greater responsibility for the content on their sites adding to that sector's woes.4
Energy stocks were also hit hard on concerns of a slowdown in economic growth hurting oil demand.
The week wasn't entirely absent of good news. Investors focused on reports of new progress in developing a vaccine and the passage in the House of Representatives of a bipartisan continuing resolution bill to fund the government through December 11th.5
Absent any apparent catalyst, stocks rallied in the final days of the week, cutting losses on major indices and powering the NASDAQ Composite to a weekly gain.
Fiscal Stimulus on Life Support
Market hopes for an additional fiscal stimulus bill, which were already fading, suffered another setback as events in Washington, D.C., appeared to make it more unlikely that lawmakers and the president could come together to fashion a compromise spending bill.
Many economists and market observers, along with Federal Reserve Chairman Jerome Powell, believe that further spending may be needed to maintain the momentum of the current economic recovery.
BY THE NUMBER$
A NEW HIGH
After adjusting numerical data from the past for the impact of inflation, the median household income in 2019 ($68,703) is the highest ever recorded in the USA and is the 4th consecutive year (2016-2019) that produced an all-time inflation-adjusted record. Before 2016, the peak for median household income was $62,641 set in 1999 (source: Federal Reserve Bank of St. Louis).
14-YEAR HIGH - New residential construction in the US totaled 139,100 housing units in July 2020, its highest monthly total recorded since September 2006. The total includes 93,100 single family homes, 700 apartment buildings with 2-4 units and 45,300 apartment buildings with 5 or more units (source: Census Bureau). 6
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: Consumer Confidence Index.
Wednesday: ADP (Automated Data Processing) Report. Gross Domestic Product (GDP).
Thursday: Jobless Claims.
Friday: Employment Situation. Factory Orders.
Source: Econoday, September 25, 2020
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Tuesday: Micron Technologies (MU), McCormick (MKC).
Thursday: Constellation Brands (STZ), Pepsico (PEP), Conagra Brands (CAG).
Source: Zacks, September 25, 2020
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
THE WEEKLY RIDDLE
A supermarket sign says you can buy energy bars at $12 a dozen. At that price, how much would it cost you to buy 100 energy bars?
LAST WEEK'S RIDDLE: A family has a mother, father, and four daughters. Each daughter has one brother. How many people are in the family?
ANSWER: Seven people - each of the daughters have one brother, there is not one brother for each daughter.