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.

 

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