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Weekly Market Insights header image

Weekly Market Insights

The Markets (as of market close​ ​​​September ​​25, 2020)

The major market indexes continued their slide to begin last week. With last Monday's losses, the S&P 500 endured its longest losing streak since February, the Dow fell 1.8%, and the Nasdaq dropped for the fifth consecutive trading session. Among market sectors, commodity, industrial, and financial shares plunged. Sobering news that the COVID-19 virus could accelerate in the fall and winter raised the prospect of further shutdowns here and abroad. On the subject of shutdowns, the government faces one following the Republicans' rejection of a Democrat-proposed funding bill. Treasury yields sank as bond prices rose. Crude oil fell while the dollar soared to an almost six-week high.

Tech stocks and mega-cap growth shares led the market rebound last Tuesday. Each of the benchmark indexes listed here posted solid gains, with the Nasdaq leading the way after advancing 1.7%, followed by the S&P 500 (1.1%), the Russell 2000 (0.8%), the Dow (0.5%), and the Global Dow (0.0%). Crude oil prices and the dollar rose while Treasury yields sank. The market surge could be the result of investors trying to clip some bargains following the selloff. Federal Reserve Chair Jerome Powell said the economy is a long way from where it needs to be and predicted that growth would be a slow ordeal. Congress still hasn't agreed on a stimulus package. However the House overwhelmingly passed a temporary funding bill, now headed to the Senate, which would avoid a government shutdown. British Prime Minister Boris Johnson imposed new business restrictions and recommended continuing a work-from-home policy to counter a second wave of COVID-19 in the United Kingdom.

Despite promising reports on the development of a COVID-19 vaccine, stocks slid dramatically by the close of trading last Wednesday. Among the sectors, tech stocks, energy shares, communication stocks, and mega-caps took a collective nosedive, pulling the rest of the market down as well. The Dow lost 1.9%, the small caps of the Russell 2000 gave back 3.0%, and the Global Dow sank 1.3%. The Nasdaq and the S&P 500 were closing in on correction territory after dropping 3.0% and 2.4%, respectively. Crude oil prices declined, the dollar climbed, and 10-year Treasury yields rose.

Stocks moved in the opposite direction last Thursday, posting moderate gains by the end of the day's trading. The Nasdaq gained 0.4%, followed by the S&P 500 (0.3%) and the Dow (0.2%). The Russell 2000 was flat and the Global Dow fell 0.6%. Treasury prices climbed, pulling bond yields lower. Crude oil prices climbed above $40.20 per barrel, and the dollar fell.

The close of last week saw stocks continue to rally. Tech stocks, real estate, and mega-caps advanced. The Nasdaq climbed 2.3%, its biggest one-day jump in two weeks. Crude oil prices and Treasury yields dipped, while the dollar gained against a basket of currencies.

Equity gains at the end of the week weren't enough to push the benchmark indexes ahead of the prior week's closing values. Only the Nasdaq posted a weekly gain. The S&P 500, the Dow, the Russell 2000, and the Global Dow each fell. The end-of-the-week push may have been driven by dip buyers, looking for stocks with depressed values. Otherwise, there wasn't much positive news to spur investors. After continued haggling, it doesn't appear that Congress and the White House can agree on a stimulus package, leading some to speculate that nothing of substance will happen until after the November election. An uptick in worldwide COVID-19 cases, coupled with a lack of government aid is not an encouraging combination for investors.

Crude oil prices dipped last week, closing at $40.12 per barrel by late Friday afternoon, down from the prior week's price of $40.84. The price of gold (COMEX) plunged last week, closing at $1,866.10, down from the prior week's price of $1,958.10. The national average retail price for regular gasoline was $2.168 per gallon on September 21, $0.015 lower than the prior week's price and $0.486 less than a year ago.

Market/Index

2019 Close

Prior Week

As of 9/25

Weekly Change

YTD Change

DJIA

28,538.44

 27,657.42 27,173.96

-1.75%

-4.78%

Nasdaq

8,972.60

10,793.28 10,913.56 1.11% 21.63%

S&P 500

3,230.78

3,319.47

3,298.46

-0.63% 2.09%

Russell 2000

1,668.47

1,536.78

1,474.91 -4.03% -11.60%

Global Dow

3,251.24 3,041.96 2,916.01
-4.14%
-10.31%

Fed. Funds target rate

1.50%​–1.75%

0.​00%​–0.25%

0.​00%​–0.25%

 0 bps

-150 bps

10-year Treasuries

1.91%

0.6​9%

0.65%

-4 bps

-​​​​​126 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic Headlines

  • Existing home sales continued to soar in August, marking the third consecutive month of advancing sales gains. Total existing home sales rose 2.4% in August from July. Total sales are ahead of last year's pace by 10.5%. Single-family home sales climbed 1.7% in August. The median existing home price was $310,600 in August ($304,100 in July), which is 11.4% above the August 2019 median price of $278,800. The median price for existing single-family home sales was $315,000 last month ($307,800 in July). Total housing inventory fell 0.7% in August from July and sits at a 3.0-month supply.
  • Sales of new single-family homes also climbed last month. According to the Census Bureau, new single-family home sales rose 4.8% in August over July and are 43.2% above the August 2019 estimate. The median sales price of new houses sold in August 2020 was $312,800 ($327,800 in July). The average sales price was $369,000 ($371,900 in July). The estimate of new houses for sale at the end of August was 282,000, representing a 3.3-month supply at the current sales rate.
  • Orders for durable goods increased for the fourth consecutive month in August, according to the latest information from the Census Bureau. New orders for durable goods advanced 0.4% last month. Although new orders are rising, they're still 11.3% lower than a year ago. Excluding transportation, new orders also rose 0.4%. Excluding defense orders, new orders climbed 0.7%. Machinery led the increase in August, surging 1.5%. With the increase in new orders, it isn't surprising that shipments (-0.3%), unfilled orders (-0.6%), and inventories (-0.1%) decreased. Nondefense new orders for capital goods in August increased 7.8%.
  • For the week ended September 19, there were 870,000 new claims for unemployment insurance, an increase of 4,000 from the previous week's level, which was revised up by 6,000. According to the Department of Labor, the advance rate for insured unemployment claims was 8.6% for the week ended September 12, a decrease of 0.1 percentage point from the prior week's rate, which was revised up by 0.1 percentage point. The advance number of those receiving unemployment insurance benefits during the week ended September 12 was 12,580,000, a decrease of 167,000 from the prior week's level, which was revised up by 119,000.

Eye on the Week Ahead

The final report on gross domestic product for the second quarter is out this week and should have the economy retracting at a rate of nearly 32%. The other important economic report out this week focuses on personal income, consumer spending, and consumer prices for August. The prior month saw personal income rise 0.4%, consumer spending jump 1.9%, and prices advance 0.3%.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Market summaries contain information on the Dow, S&P 500, NASDAQ, Russell 2000, Global Dow, Federal Funds interest rate, and 10-year Treasury yields, as well as highlights of past and future economic data.

The Markets (as of market close​ ​​​September ​1​8, 2020)

Stocks rebounded to begin last week on a positive note, as each of the benchmark indexes listed here posted notable gains by the close of trading last Monday. Tech stocks surged, pushing the Nasdaq up 1.9%. Hopes for a COVID-19 vaccine moved pharmaceutical shares higher. Energy shares fell as crude oil prices dropped. The dollar declined, while Treasury yields moved slightly higher.

Last Tuesday saw stocks post their second consecutive session of gains. Tech stocks and mega-caps continued to rebound. Other than the Dow, which was flat, each of the benchmark indexes listed here posted gains, led by the Nasdaq (1.2%), followed by the S&P 500 (0.5%), the Russell 2000, and the Global Dow, each of which gained 0.8%. Crude oil prices and Treasury yields rose, and the dollar was mixed against a basket of currencies.

Stocks were mixed last Wednesday, with the Dow, the Russell 2000, and the Global Dow posting modest gains, while the S&P 500 and the Nasdaq fell. Mega-caps and tech stocks reversed course from the prior few days and sank. Energy shares rose, boosted by advancing oil prices. Value stocks performed better along with financial shares. Treasury yields, the dollar, and crude oil prices each rose.

Last Thursday, each of the benchmark indexes gave back any gains from earlier in the week. Word that Congress and the president may be nearing an accord on a new round of stimulus wasn't enough to keep money from flowing out of the market. Investors may have been perplexed by the confusing government rhetoric on when a COVID-19 vaccine would be available. Tech stocks and mega-caps took a big hit, pulling stock indexes lower. The Nasdaq lost 1.3%, the S&P 500 fell 0.8%, both the Russell 2000 and the Global Dow dropped 0.6%, and the Dow declined 0.5%. Treasury yields and the dollar fell, while crude oil prices rose.

Tech stocks and mega-caps continued to slide last Friday. Each of the benchmark indexes listed here lost value by the end of the day, with the S&P 500 and the Nasdaq each falling 1.1%, closely followed by the Dow (-0.9%), the Global Dow (-0.7%), and the Russell 2000 (-0.4%). Treasury yields advanced, crude oil prices fell, and the dollar rose.

Overall, stocks lost value for the week. Mixed signals from the federal government as to whether and when a virus vaccine would be available, coupled with the Federal Reserve's somber assessment of the state of the economy, prompted investors to pull away from equities. Only the small caps of the Russell 2000 gained value last week. The S&P 500, the Nasdaq, the Dow, and the Global Dow each fell behind. Despite the past few weeks of downturns, the Nasdaq remains solidly ahead of its year-end value. The S&P 500 is marginally ahead, while the other indexes listed here remain below their respective 2019 closing marks.

Crude oil prices rebounded last week, closing at $40.84 per barrel by late Friday afternoon, up from the prior week's price of $37.76. The price of gold (COMEX) advanced last week, closing at $1,958.10, up from the prior week's price of $1,950.00. The national average retail price for regular gasoline was $2.183 per gallon on September 14, $0.028 lower than the prior week's price but $0.369 less than a year ago.

Market/Index

2019 Close

Prior Week

As of 9/18

Weekly Change

YTD Change

DJIA

28,538.44

 27,665.64 27,657.42

-0.03%

-3.09%

Nasdaq

8,972.60

10,853.54 10,793.28 -0.56% 20.29%

S&P 500

3,230.78

3,340.97

3,319.47

-0.64% 2.75%

Russell 2000

1,668.47

1,497.27

1,536.78 2.64% -7.89%

Global Dow

3,251.24 3,042.09 3,041.96
-0.01%
-6.42%

Fed. Funds target rate

1.50%​–1.75%

0.​00%​–0.25%

0.​00%​–0.25%

 0 bps

-150 bps

10-year Treasuries

1.91%

0.66%

0.69%

3 bps

-​​​​​122 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic Headlines

  • Following its meeting held last week, the Federal Open Market Committee decided to keep the target range for the federal funds rate at 0.00%-0.25% and expects to maintain this target range until labor market conditions have reached maximum employment and inflation has risen to at least 2.0%, or exceeds 2% for some time. The Committee noted that economic activity and employment have picked up in recent months but remain well below their levels at the beginning of the year. Weaker demand and significantly lower oil prices are holding down consumer price inflation. Overall financial conditions have improved in recent months, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. Nevertheless, the Committee noted that the path of the economy will depend on the course of COVID-19, which will continue to weigh on economic activity, employment, and inflation in the near term, while posing considerable risks to the economic outlook over the medium term.
  • U.S. import prices rose 0.9% in August, following advances of 1.2% in July and 1.4% in June. Higher prices for both fuel (+3.3%) and nonfuel (+0.7%) imports contributed to the August increase. The increase in nonfuel prices was the largest since April 2011. Driving the nonfuel price increase was a 3.6% jump in industrial supplies and materials prices. Prices for U.S. exports also advanced in August, rising 0.5% after increasing 0.9% the previous month.
  • According to the Federal Reserve, industrial production rose 0.4% in August for its fourth consecutive monthly increase. However, even after the recent gains, industrial production in August was 7.3% below its February pre-pandemic level. Manufacturing output continued to improve in August, rising 1.0%, but the gains for most manufacturing industries have gradually slowed since June. Mining production fell 2.5% in August, as Tropical Storm Marco and Hurricane Laura caused sharp but temporary drops in oil and gas extraction and well drilling. The output of utilities moved down 0.4%. The level of total industrial production was 7.7% lower in August than it was a year earlier.
  • Sales at the retail level advanced 0.6% in August from the previous month and 2.6% above their August 2019 pace. Retail trade sales inched ahead 0.1% in August. Nonstore (online) retail sales were flat last month but are 22.4% ahead of August 2019. Retailers that had a favorable August include furniture and home furnishing stores (2.1%); building material and garden equipment and supplies dealers (2.0%); clothing and clothing accessories stores (2.9%); and food services and drinking places (4.7%). Retailers that slumped last month include sporting goods, hobby, musical instrument, and book stores (-5.7%); department stores (-2.3%); grocery stores (-1.6%); and food and beverage stores (-1.2%).
  • Overall, housing starts and building permits fell in August, although the market for new single-family residential construction excelled. The number of building permits issued in August was 0.9% below the July total. However, single-family building permits were 6.0% higher than July. Housing starts also fell in August, dropping 5.1% below the prior month's figure. Single-family housing starts rose by 4.1% last month. Housing completions fell 7.5% in August from July. Single-family housing completions were 4.4% below the July rate.
  • For the week ended September 12, there were 860,000 new claims for unemployment insurance, a decrease of 33,000 from the previous week's level, which was revised up by 9,000. According to the Department of Labor, the advance rate for insured unemployment claims was 8.6% for the week ended September 5, a decrease of 0.7 percentage point from the prior week's rate. The advance number of those receiving unemployment insurance benefits during the week ended September 5 was 12,628,000, a decrease of 916,000 from the prior week's level, which was revised up by 159,000.

Eye on the Week Ahead

Two important reports in the housing sector are available this week. August data for both new and existing home sales should reveal continued growth, following July's robust sales report. Orders for durable goods are also out this week for August. July saw new orders jump more than 11.0% as the economy continues to slowly pick up steam.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment. 

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Market summaries contain information on the Dow, S&P 500, NASDAQ, Russell 2000, Global Dow, Federal Funds interest rate, and 10-year Treasury yields, as well as highlights of past and future economic data.

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