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Weekly Economic Update - June 29, 2020

In this week’s recap: a rise in COVID-19 cases inspires turbulence in markets, tapping the brakes on economic recovery.

Weekly Economic Update

 

 

Presented by Paul Moffat, MBA, AIF®, June 29, 2020

 

THE WEEK ON WALL STREET

A jump in COVID-19 cases dampened investor enthusiasm last week, sending stock prices lower on worries that rising infections could derail the economic recovery.  

The Dow Jones Industrial Average slumped 3.31%, while the Standard & Poor’s 500 retreated 2.86%. The Nasdaq Composite Index lost 1.90% for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, declined 1.28%.1,2,3 

A Rocky Week for Stocks

Investors began the week overlooking a jump in COVID-19 cases in some early reopening states, sending stocks higher and powering the Nasdaq Composite to close above 10,000 and establish a new record high on successive days. But the market quickly reversed course as investors reacted to data showing a troubling spike in nationwide COVID-19 cases.4

In Thursday’s trading, stocks opened lower but rallied late in the day on no apparent news. Stocks resumed their decline on Friday, falling on news that Texas and Florida were rolling back some reopening plans amid rising COVID-19 infections.5

COVID-19 Cases 

Investor expectations for an economic rebound took a hit last week, following reports of an increase in nationwide COVID-19 cases. The pace of infections had picked up in 33 states, with the seven-day average of new cases higher than the average over the last two weeks.6 

While traders understood that reopening and increased testing would lead to an uptick in reported cases, the numbers were a bit unsettling. The week’s action reminded investors that the market remains tightly tethered to COVID-19 developments.

 

 

T I P   O F    T H E   W E E K
 


 Ward off impulse buying with a 30-day list. If you feel like you have to have something, put it on your 30-day list. See if you still have the urge to buy it after 30 days. Chances are? You won’t.

 

 

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: ADP (Automatic Data Processing) Employment Report. Purchasing Managers Index (PMI) Manufacturing Index. Institute for Supply Management (ISM) Manufacturing Index. Federal Open Market Committee (FOMC) Minutes. 

Thursday: Employment Situation Report. Jobless Claims. Factory Orders.

Source: Econoday, June 26, 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

Monday: Micron Technologies (MU). 

Tuesday: FedEx Corp. (FDX), Conagra Brands (CAG).

Wednesday: Constellation Brands (STZ), General Mills (GIS). 

Source: Zacks, June 26, 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.

 

 

Q U O T E   O F   T H E   W E E K

 

“Amusement to an observing mind is study.”

BENJAMIN DISRAELI

 

 

 

T H E   W E E K L Y    R I D D L E

 

Can you determine the numeral between 1 and 100 that is also nine times the sum of its digits?

 

LAST WEEK’S RIDDLE: What is the only planet within our solar system that rotates clockwise?

ANSWER: Venus.

 

 

 Paul Moffat, MBA, AIF® may be reached at 702.309.9970 or paul@aristawealth.com
www.aristawealth.com

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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. 

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. 

The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.

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CITATIONS:

1 – The Wall Street Journal, June 26, 2020
2 – The Wall Street Journal, June 26, 2020
3 – The Wall Street Journal, June 26, 2020
4 – Marketwatch.com, June 23, 2020
5 – FoxBusiness.com, June 26, 2020
 6 – The Wall Street Journal, June 25, 2020

CHART CITATIONS:

The Wall Street Journal, June 26, 2020
The Wall Street Journal, June 26, 2020
 Treasury.gov, June 26, 2020