Last week began with a bang. The Dow climbed 1.4% to reach 28,300 for the first time since February. Investors were encouraged by word that the Trump administration may push the Food and Drug Administration to approve vaccines and treatments for the COVID-19 virus. While the rhetoric may be more bark than bite, it was enough to push market indexes to record highs. The Nasdaq advanced 0.6%, and the S&P 500 rose 1.0%, each reaching all-time highs. The Russell 2000 gained 1.0%, and the Global Dow picked up 1.5%. The dollar, Treasury yields, and crude oil prices all rose. Sectors that enjoyed a strong start to the week were energy, financials, and industrials. Technology and health care also posted modest advances.
Last Tuesday saw stocks advance despite weakening consumer confidence. Word that the United States and China intend to honor their commitment to the phase-one trade deal offered some encouragement for investors. The Nasdaq and the S&P 500 reached new highs, while the Global Dow (0.2%) and the Russell 2000 (0.2%) posted modest gains. Of the indexes listed here, only the Dow lost value. Crude oil prices and the dollar fell, while Treasury prices dropped, pushing yields higher.
Stocks continued to reach record highs last Wednesday on the expectations that the Federal Reserve will continue its supportive monetary policy and keep interest rates low. A strong durable goods report also helped boost investor confidence. Mega-cap stocks and technology shares drove the market higher. The dollar weakened; gold, crude oil, and Treasury yields rose.
Stocks were mixed last Thursday with the Dow, the S&P 500, and the Russell 2000 posting gains, while the Nasdaq and the Global Dow fell. Crude oil prices fell, the dollar was mixed, and Treasury yields surged. As expected, Federal Reserve Chair Jerome Powell indicated that the Fed would continue its accommodative measures and allow the economy to expand essentially without reins until it nears the Fed’s 2.0% target rate for inflation. Financials, real estate, and health care performed well on the day, while communications, tech, and energy lagged.
Last week ended on a high note for stock indexes. The Dow and the Nasdaq advanced 0.6%, respectively last Friday. The S&P 500 gained 0.7% to reach an all-time high for the sixth consecutive trading session. The Russell 2000 climbed 0.9% on the day, and the Global Dow climbed 0.7%. Crude oil prices declined on the day, and the dollar fell to its lowest level in nearly two years.
For the week, each of the benchmark indexes posted solid gains, led by the Nasdaq, and followed by the S&P 500, the Global Dow, the Dow, and the Russell 2000. Investors were buoyed by optimism about COVID-19 treatments and vaccines, assurances that the Federal Reserve will continue its accommodative stance, low interest rates, and muted inflation. Year to date, the Dow finally passed its 2019 closing value, joining the Nasdaq and the S&P 500.
Crude oil prices ended the week at $42.97 per barrel by late Friday afternoon, up from the prior week’s price of $42.29. The price of gold (COMEX) increased last week, closing at $1,972.80, up from the prior week’s price of $1,946.20. The national average retail price for regular gasoline was $2.182 per gallon on August 24, $0.016 higher than the prior week’s price but $0.392 less than a year ago.
Market/Index | 2019 Close | Prior Week | As of 8/28 | Weekly Change | YTD Change |
---|---|---|---|---|---|
DJIA | 28,538.44 | 27,930.33 | 28,653.87 | 2.59% | 0.40% |
Nasdaq | 8,972.60 | 11,311.80 | 11,695.63 | 3.39% | 30.35% |
S&P 500 | 3,230.78 | 3,397.16 | 3,508.01 | 3.26% | 8.58% |
Russell 2000 | 1,668.47 | 1,552.48 | 1,578.34 | 1.67% | -5.40% |
Global Dow | 3,251.24 | 3,028.45 | 3,113.05 | 2.79% | -4.25% |
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% | 0.64% | 0.72% | 8 bps | -119 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.
Important economic reports focusing on manufacturing, trade, and employment are out this week. Purchasing managers reported that manufacturing advanced in July for the first time in several months. August should show continued progress. The goods and services trade deficit was smaller in June than in the prior months. The July trade deficit is expected to expand further. There were nearly 1.8 million new jobs added in July. August’s figures may not be as robust.
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 of 500 largest, publicly traded 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.
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