The Markets (as of market close June 26, 2020)
The week began with the stock market picking up where it left off the previous week. Each of the benchmark indexes listed here advanced in value, led by the tech-heavy Nasdaq, which jumped 1.10%, pushed higher by Amazon and Adobe. Last Monday’s run marked the seventh straight advance for the Nasdaq — its longest rally of the year. The Russell 2000 gained 1.00%, followed by the S&P 500, the Dow, and the Global Dow. Crude oil reached $40 per barrel for the first time in quite a while, the dollar dropped, and the yield on 10-year Treasuries inched higher. Stock values climbed despite the accelerating number of COVID-19 cases reported.
Tuesday saw both the Nasdaq and Russell 2000 continue to surge. In fact, the Nasdaq hit an all-time high as investors seemed to focus on signs of economic growth and the expectation of more government stimulus. President Trump tweeted that the U.S.-China trade deal remains fully intact, which further encouraged investors despite U.S. health advisor Anthony Fauci’s warning of a disturbing surge in COVID-19 cases. Apple, Amazon, and Microsoft were winners at the end of the day, as were road and rail stocks, real estate, utilities, airlines, and retailers.
Stocks took a nosedive midweek as the growing number of reported COVID-19 cases was too much for investors to ignore. The pandemic is prompting fears that renewed restrictions will slow economic growth. Money poured into bonds, pushing prices higher and driving yields lower. Among sectors taking a particularly hard hit last Wednesday were energy, financials, and industrials. Airline stocks, which had been climbing as restrictions eased, got pummeled. Each of the indexes listed here took a sizeable hit, led by the small caps of the Russell 2000, which gave back nearly 3.50%. The Dow closed down 2.72% on the day, followed by the Global Dow, the S&P 500, and the Nasdaq, which ended its run of daily gains by sinking 2.19%.
Thursday was a better day for equities as each of the benchmark indexes listed here posted gains, led by the Russell 2000, which climbed nearly 2.00%. Bank stocks enjoyed a good boost after the Federal Deposit Insurance Corporation eased limits on bank risk-taking. As stocks climbed, more bad news came from the COVID-19 front. Thursday, the number of new virus cases surpassed April’s peak, prompting the governor of Texas to pause the process of reopening. Also, new weekly claims for
unemployment insurance approached 1.5 million — a figure that’s lower than the prior week, but still indicative of the number of people who have lost their jobs.
Both Texas and Florida imposed new restrictions as reported virus cases surged last Friday, sending stocks tumbling. These are the first states to reimpose restrictions, although several other states are considering added restrictions and/or delaying reopenings. The Dow fell 2.84%, the Nasdaq dropped 2.59%, and both the S&P 500 and Russell 2000 gave back more than 2.40%, respectively.
For the week, each of the benchmarks lost notable value, led by the Dow, which fell more than 3.30%. Clearly, rising COVID-19 cases throughout several parts of the country have curbed investor enthusiasm over encouraging economic news. The market swung up and down for much of the week, with bank stocks being particularly volatile. After the FDIC eased restrictions on bank investing last Thursday, the Federal Reserve indicated its plan to restrict banks’ sharing of profits through dividends and share repurchases. Of the remaining indexes listed here, the S&P 500 fell back into correction territory after dropping 2.86%. The small caps of the Russell 2000 lost nearly 3.00%, the Global Dow declined nearly 2.25%, while the Nasdaq fared the best, losing less than 2.00% for the week.
After climbing higher the week before, crude oil prices sank lower last week, closing at $38.10 per barrel by late Friday afternoon, down from the prior week’s price of $39.50. The price of gold (COMEX) advanced again last week, closing at $1,784.10 by late Friday afternoon, up from the prior week’s price of $1,755.10. The national average retail regular gasoline price was $2.129 per gallon on June 22, 2020, $0.031 higher than the prior week’s price but $0.525 less than a year ago. For more click here::Winthrop Partners Weekly Update 6-29-2020
Thomas Saunders is the Managing Partner of Winthrop Partners. Prior to founding Winthrop Partners, Tom was Senior Vice President at what is now JP Morgan. His career includes senior and executive roles at Brown Brothers Harriman and First Niagara Bank, a top 25 Bank. Click here to contact Thomas Saunders about your investment and planning requirements.