Weekly Market Recap – Week Ending July 10th, 2020
What Did The Market Indexes Do?
|Dow Jones Industrial Average||+1.0%||26,075.3||-7.4%|
|NASDAQ Composite Index||+4.0%||10,617.4||+18.9%|
|S&P 500 Index||+1.8%||3,185.0||-0.4%
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Stocks End in the Green
For the second week in a row, the major indexes ended the week on a positive note last week. While it didn’t match the performance of the week prior, it was still good news for stocks. As you’ll see above, the NASDAQ crushed it again, ending up 4% on the week, while the S&P 500 went up about 2% and the Dow Jones went up around 1%.
Speaking of the NASDAQ, its performance last week pushed it into a new record. In fact, since the dismal performance in the third week of March, the index has gone up close to 59%. Experts credit the strong performance of the NASDAQ these past few months to big tech stocks–which have a bigger influence on the index overall.
Earnings Still Expected to Be Weaker
As I talked about last week, earnings week opens up this week and the expectations are still pretty bad. According to FactSet, earnings for companies in the S&P 500 are projected to drop by about 44% when compared to 2Q19. This would be the biggest drop since 4Q08. The big banks will kick off reporting season on Tuesday, July 14th.
This may or may not have an impact on the stock market. Typically, we see market movement when earnings are unexpected–either higher or lower. This is pretty much expected that earnings are going to be a lot lower, so if companies come out with more positive earnings, we could see a big uptick in the market.
COVID-19 Continues to Dominate Headlines
As we’ve seen for the better half of the year, COVID-19 has driven headlines and most of the stock movement. Some states are seeing a record number of new cases and there is more news of possible vaccines being developed–which has proven to be positive news for the market.
This is still intriguing. We’ve been talking about a vaccine for months now, and while progress is being made, we still don’t have anything solid to count on. Yet the market will react to positive news like this – so my advice is to not react as the market goes up and down on vaccine-related news. Remember that even once a vaccine is found, it still has to go through tons of testing and distribution channels before it reaches the masses.
Oil Keeps Its Price Point
A couple of weeks ago you saw that oil went up to around $40 per barrel–which was a high on the year. Since then, the price of oil has dipped slightly, but we saw it bounce back to around $40 last week. Since April, the price of crude oil has almost doubled.
Oil is a good barometer on the economy and markets. Months ago, investing in oil was a hot topic, and some may argue that it still is. Regardless of whether or not you’re investing in crude, it’s helpful to keep a pulse on how prices are trending globally.
Update on a Second Stimulus
Last week, the Treasury Secretary stated that he anticipates the U.S. Senate will approve a second COVID-19-related stimulus package, and it could happen as soon as the end of July. While there’s still a lot up in the air, the key topics of discussion are enhancing unemployment benefits again (since the original enhancements are going to expire soon), as well as a second round of stimulus payments.
Invest Your Money
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|Ally Invest||Portfolio diversification|
|Wealthfront||First time investors|
|Personal Capital||Large investors|
|Acorns||Students and young investors|
|M1 Finance||Customizing your portfolio|
|Wealthsimple||Unique investment options like SRI|
|Vanguard Personal Advisor Services||High net worth, buy and hold investors|