US Equity Markets continued to see profit-taking in the holiday-shortened week last week, as hopes for any additional fiscal stimulus from Washington to support the US economy faded following the failure of a slimmed-down relief bill. The S&P 500 dropped 2.5% for the week to bring its gains for the year down to 3.4%. The Nasdaq declined a sharp 4.1% for the week due to hits to mega-cap Technology stocks, though it remains up 21.0% for the year. The Russell 2000 (small-cap stocks) fell 2.5% for the week and is now down 10.3% for the year.
Global Equity Markets fared much better than the US last week, as strong economic growth data out of Europe boosted markets. As a result, Developed Markets rose 1.3% for the week led by European shares, but Developed Markets remain down 6.9% for the year. Emerging Markets fell 0.7% for the week, impacted by ongoing declines in energy prices. For the year, Emerging Markets are now negative, down 2.1%.
US labor market data was disappointing last week. Initial Jobless Claims came in at 884K, which was flat from the prior week and worse than expectations, raising some concerns that the recent improvements are starting to fade. Consumer-related inflation data for August also came in a little higher than projections.
Of Interest to Us
After posting a decline in US economic growth in the second quarter 2020 of 31.7% (still subject to revision), estimates for US economic growth for the third quarter 2020 are increasing notably. While economists have been expecting a double-digit bounce in growth, estimates now suggest that the third quarter could increase by 25%, up from 20% at the beginning of September.
Market Data
for the week ending 9/11/2020
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