Market Perspective for September 27, 2020

The Nasdaq increased 1.11 percent last week. The S&P 500 Index declined 0.45 percent, the Dow Jones Industrial Average 1.75 percent and the Russell 2000 Index 4.03 percent.

SPDR Technology (XLK) climbed 2.19 percent, SPDR Utilities (XLU) 1.22 percent and SPDR Consumer Discretionary (XLY) 0.19 percent.

Existing home sales exceeded already bullish expectations, hitting an annualized pace of 6.00 million in August. New home sales crushed expectations by more than 100,000, hitting an annualized pace of 1.01 million. Homebuilders are at their most confident ever and new home sales are hitting levels last seen during the 2000s housing bubble. Still, adjusted for population growth, home sales are not yet at “bubble” levels.

Initial claims for unemployment were 870,000 last week, which has been consistent over the past few weeks. Continuing claims continued to fall. Last week, there were 12.58 million Americans still drawing checks from the various state unemployment programs.

Both the flash manufacturing and service PMIs rose from August levels and show the U.S. economy is expanding at a healthy rate.

The U.S. Dollar Index gained 1.79 percent last week. The move created an intense headwind for foreign stocks. iShares MSCI EAFE (EFA) fell 3.16 percent and iShares MSCI Emerging Markets (EEM) slid 3.55 percent.

Crude oil fell more than 2 percent last week, closing at $40 per barrel. SPDR Energy (XLE) slid 8.76 percent. Solar stocks bucked the trend and traded higher with technology. Invesco Solar (TAN) rose 4.46 percent.

The ETF Investor Guide for September 2020

The September Issue of the ETF Investor Guide is AVAILABLE NOW! Links to the September Data Files have been posted below. Market Perspective: The Economy is Rebounding Ahead of Schedule Economic […]

Market Perspective for September 21, 2020

Stocks decline on the day with the Nasdaq slipping 0.13 percent, the S&P 500 Index 1.16 percent, the Dow Jones Industrial Average 1.84 percent and the Russell 2000 Index 3.35 percent.

SPDR Technology (XLK) gained 0.86 percent on Monday.  SPRD Utilities (XLU) fell 0.62 percent and SPDR Consumer Staples (XLP) 0.67 percent. Selling on Monday was concentrated in energy, materials and industrials, with all three sectors sliding more than 3 percent.

Technology was boosted on the news that TikTok could be purchased by Oracle (ORCL) and Walmart (WMT). The companies gained 1.79 percent and 1.32 percent, respectively, on the day. The agreement is still subject to government approval.

Economists predict existing home sales hit an annualized pace of 6.03 million in August. They see new home sales pulling back slightly from an annualized 901,000 in July to 890,000 in August. iShares U.S. Home Construction (ITB) slid 1.81 percent.

Flash PMIs for September will be out on Wednesday. Both manufacturing and services were expanding in August.

Multiple Federal Reserve officials will speak publicly this week. Fed Chairman Powell will testify before Congress on the impact of coronavirus and the CARES Act on Tuesday, Wednesday and Thursday. Aside from Powell’s testimony, there will be 20 public speeches or testimony by various regional Fed presidents and other top officials.

Crude oil declined $1.78 per barrel on Monday, closing at $39.54. Natural gas tumbled 10.40 percent, taking its loss over the past month to over 30 percent.

iShares MSCI Emerging Markets (EEM) fell 0.92 percent and iShares MSCI EAFE (EFA) 2.53 percent.

The 10-year Treasury yield closed at 0.67 percent. It has spent the bulk of the past six weeks trading between 0.63 percent and 0.73 percent.