Market Perspective for August 10, 2020

Value stocks extended their gains on Monday. The Dow Jones Industrial Average gained 1.30 percent. The S&P 500 Index rose 0.27 percent, while the Nasdaq fell 0.39 percent.

SPDR Energy (XLE) popped 3.09 percent to start the week. SPDR Industrials (XLI) rose 2.46 percent and SPDR Consumer Discretionary (XLY) 1.20 percent.

President Trump signed an executive order on coronavirus relief over the weekend. The federal government will pay $300 per week in extra unemployment benefits. States will have to contribute $100 if they choose. Trump’s order taps unspent disaster relief funds from the current budget. There were also three memoranda extending foreclosure protection, student loan deferrals and deferred payroll taxes.

The National Federation of Independent Business release its small-business confidence index tomorrow. Producer prices will also be out. Economists anticipate prices increased 0.3 percent in July.

Consumer prices are forecast to rise 0.4 percent, with the core CPI up 0.2 percent.

Economists see initial jobless claims sliding to 1.10 million for the week ended August 8.

Analysts project July retail sales climbed 2.0 percent, with sales ex-autos up 1.1 percent. The University of Michigan’s advance reading of August consumer sentiment is expected to dip slightly from July’s number.

Shares of Royal Caribbean (RCL) climbed 10 percent on Monday, despite reporting a second-quarter loss. While the company missed earnings estimates by a wide margin, investors were focused on revenue. Analysts expected $43.5 million in sales, but Royal Caribbean saw $175.6 million, a sign the cruise industry could bounce back faster than expected.

On Tuesday, investors will hear from Sysco (SYY), Lumentum (LITE) and Broadridge Financial (BR).

Cisco (CSCO) headlines Wednesday earnings reports. Macy’s (M) also kicks off the heart of retail earnings season.

Applied Materials (AMAT), Baidu (BIDU), NetEase (NTES) and Tapestry (TPR) report on Thursday.

The week closes out with Draft Kings (DKNG) and Remark Holdings (MARK).

 

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