Increased Growth Concerns Take Hold of Wall Street leading to Cyclical Sector Sell-off

Market Recap Week ending 9/25/2020

It was a wild ride on Wall Street this week as increased growth concerns took hold and induced widespread selling in the cyclical sectors. Investors found solace again in the technology sector late in the week, which provided enough of a lift to advance the Nasdaq to a weekly gain.  News of Justice Ginsberg’s passing last weekend added another layer of political divergence as Republicans vowed to fill the position before the upcoming election.  The focus in Washington appears to have shifted to fill the vacancy at the Supreme Court from finding a solution on a fiscal stimulus plan.  In Washington, Fed Chairman Jerome Powell pleaded with lawmakers to get another fiscal package passed and painted an even more uncertain path of economic recovery without a relief package.

For the week, the S&P 500 fell 0.6%, the Dow shed 1.8%, the NASDAQ bucked the trend with a gain of 1.1%, and the Russell 2000 lost 4%.  The US Treasury curve flattened with the 2-year note yield trading unchanged at 0.13%, and the 10-year bond yield losing three basis points to close at 0.66%.  Growth concerns dampened inflation expectations, which sent gold prices 4.9% lower to close at $1866.30 an Oz.  Oil prices fell ~2% or $0.87 to close at 40.22 a barrel.  There were no changes to our models last week.