The Fiduciary Advisor Report – Monday, August 10, 2020 – Alpine, Utah
THE WEEK ON WALL STREET
Overlooking stalled efforts by Congress to pass a new fiscal stimulus bill, stocks marched higher last week with the Dow Jones Industrials leading the way and the NASDAQ Composite setting multiple fresh record highs.
The Dow Jones Industrial Average gained 3.80%, while the Standard & Poor’s 500 rose by 2.45%. The Nasdaq Composite index climbed 2.47% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, advanced 2.31%.1-3
Earnings Season Winds Down
A string of encouraging news reports, including a decline in new COVID-19 cases nationwide, pushed stock prices higher throughout the week. Stocks also rallied on signs of a pick-up in manufacturing activity, factory orders that came in well above estimates, and a better-than-expected new jobless claims number.4,5
Congress wasn’t able to come to an agreement on a stimulus package, which disappointed some investors. But it wasn’t enough to slow the daily climb in the equity markets, with the NASDAQ Composite index closing above 11,000 for the first time, while the S&P 500 index closed in on its record high set in February of this year.6
Stocks drifted on Friday even though the employment report showed that employers added 1.8 million jobs in July, lowering the unemployment rate to 10.2%.7
One Eye on Bonds, Gold
The continued rally in stock prices appears to suggest that the U.S. economy may maintain its recovery through the second half of the year and into 2021. But the bond market and gold prices suggest a different outlook.
Last week the yield on 10-year Treasuries touched their lowest level since early March, signaling that bond investors may be less convinced about economic prospects.8
Meanwhile, gold traded over $2,000 per ounce. While the rise in gold prices this year has been largely propelled by historically low interest rates, its reputation as a store of value has attracted investors worried about stock market volatility and a potential uptick in inflation.9
FINAL Thoughts
It was reported last week that the U.S. and China agreed to meet by videoconference on August 15 to discuss compliance with the terms of the Phase One trade deal.10
With tensions running high between the two nations, expect Wall Street to keep a close eye on any developments that may appear connected to the virtual meeting.
T I P O F T H E W E E K
If a major financial or life event is coming up on your calendar, talk to a financial professional about it now. See what ideas they may have about how to manage the event.
THE WEEK AHEAD: KEY ECONOMIC DATA
Monday: Job Openings and Labor Turnover Survey (JOLTS).
Wednesday: Consumer Price Index (CPI).
Thursday: Jobless Claims.
Friday: Retail Sales. Industrial Production. Consumer Sentiment.
Source: Econoday, August 7, 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: Marriott International (MAR).
Wednesday: Cisco Systems (CSCO), Tencent Holdings (TCEHY), Lyft (LYFT).
Friday: Draftkings (DKNG).
Source: Zacks, August 7, 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
“Friendship marks a life even more deeply than love.”
ELIE WIESEL
T H E W E E K L Y R I D D L E
Nancy was born in summer, yet she was born in January. How is this possible?
LAST WEEK’S RIDDLE: You spend 20% of the money in your wallet. Then you spend 20% of what remains in your wallet after that. You spend $72.00 total. How much money did you originally have in your wallet?
ANSWER: $200. $200 – $40 = $160, then $160 – $32 = $128 with $72 of the original $200 spent.
CITATIONS:
1. The Wall Street Journal, August 7, 2020
2. The Wall Street Journal, August 7, 2020
3. The Wall Street Journal, August 7, 2020
4. MarketWatch.com, August 4, 2020
5. The Wall Street Journal, August 6, 2020
6. CNBC, August 6, 2020
7. The Wall Street Journal, August 7, 2020
8. MarketWatch, August 4, 2020
9. The Wall Street Journal, August 5, 2020
10. CNBC.com, August 4, 2020
CHART CITATIONS:
The Wall Street Journal, August 7, 2020
The Wall Street Journal, August 7, 2020
Treasury.gov, August 7, 2020
This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by MarketingLibrary, Inc., for Mark Lund, Mark is known as a Wealth Advisor, The 401k Advisor, Investor Coach, Financial Advisor, Financial Planner, Investment Advisor and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment and retirement planning for individuals and 401k consulting for small businesses. Mark’s newsletter is called The Fiduciary Report. Cities served in Utah are: Salt Lake County, Utah County, Park City, Salt Lake City, Murray, West Jordan, Sandy, Draper, South Jordan, Provo, Orem, Lehi, Highland, Alpine, American Fork.
Category: Blog, Growth Report
