Mixed Economic Data leads to another Quiet Week on Wall Street
Market Recap week ending 8.21.20
It was a very quiet week on Wall Street. The Democrats formally announced Joe Biden as their nominee for President. At the same time, the White House and Congress continued to be far apart on a deal for a coronavirus stimulus package. The minutes from the most recent Federal Reserve meeting revealed the shared concerns by members about the economic damage that has been done and the likelihood that this could be a prolonged recovery. Economic data for the week continued to be mixed. Apple gained 8.2% on the week and eclipsed a market cap of two-trillion.
For the week, the S&P added 0.7%, the Dow trade unchanged, the NASDAQ, helped by mega-cap tech, led with a gain of 2.7%, and the small-cap, Russell 2000, lagged with a loss of 1.6%. The yield curve flattened during the week with longer-tenured issues showing gains while the shorter-end saw some minor losses. The 2-year note yield increased two basis points to close at 0.15%. The 10-year bond yield fell seven basis points to close at 0.63%. WTI increased a fraction to close at $42.26 a barrel. Gold, too, was little changed, losing $3.20 to close at $1946.70 an Oz. We did have some changes to our Strategic model series, where we increase our equity exposure in US Large-caps while reducing some of our cash. The changes were made in the Aggressive, Growth, and Balanced models.
On the economic front, initial claims were a bit disappointing. The report showed 1.106 million people had applied for unemployment insurance a regression from last week’s figure of 971k. However, continuing claims continued to come down during the week with a reported 14.844 million versus the previous week’s figure of 15.480 million. The housing market continued to display strength. Existing home sales for July came in at the strongest annualized rate in history at 5.86 million. July’s data came in up 24.7% on a month over month basis. European flash composite PMI data was weaker than expected coming in at 51.6 versus the estimate of 54.9 and last month’s 54.9 reading.
