Market Perspective for August 23, 2020

The Nasdaq gained 2.65 percent, while the S&P 500 Index 0.72 percent last week. The Dow Jones Industrial Average was flat and the Russell 2000 Index fell 1.77 percent. Economic data showed a strong housing rebound is underway.

Technology-related sectors were the best performers. SPDR Technology (XLK) climbed 3.57 percent. Large-cap technology lifted the sector, with Apple (AAPL) rising 8.18 percent. Apple came within 53 cents of $500 per share. Nvidia (NVDA) delivered solid earnings and rose 9.63 percent. SPDR Consumer Discretionary (XLY) climbed 1.82 percent. SPDR Communication Services (XLC) advanced 1.57 percent. Tesla (TSLA) also climbed to a new all-time high above $2000 per share.

The National Association of Homebuilders said its August homebuilders’ sentiment index matched the all-time high set in 1990. The reading comes with housing starts, building permits and existing home sales shooting past estimates in July. With people working from home and homeschooling, the demand for larger living spaces has resulted. Urban residents are also leaving cities in significant numbers, and seeking single-family housing. iShares U.S. Home Construction (ITB) climbed 4.51 percent on the week.

Initial jobless claims climbed to 1.11 million for the week ending August 15th. Continuing claims continued falling though, with state programs reporting a decline of 0.7 million to 14.8 million.

iShares MSCI EAFE (EFA) slid 0.62 percent on the week. iShares MSCI Eurozone (EZU) slipped 1.09 percent and iShares MSCI Japan (EWJ) fell 0.41 percent.

The 10-year Treasury yield fell to 0.64 percent this week. iShares 20+ Year Treasury (TLT) finished the week with a gain of 1.87 percent. iShares iBoxx High Yield Corporate Bond (HYG) rallied 0.77 percent, iShares iBoxx Investment Grade Corporate Bond (LQD) 0.75 percent and Fidelity Corporate Bond (FCOR) 0.66 percent.

Energy stocks fell on the week, despite crude oil holding steady. SPDR Energy (XLE) dipped 5.71 percent. Natural gas prices climbed due to higher temperatures around the country, but producers saw an even larger sell-off. First Trust Natural Gas (FCG) declined 8.92 percent.

 

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