Table of Contents:
Weekly Market Recap – Week Ending July 17th, 2020
What Did The Market Indexes Do?
|Dow Jones Industrial Average||+2.3%||26,672.0||-5.3%|
|NASDAQ Composite Index||-1.1%||10,503.2||+17.7%|
|S&P 500 Index||+1.3%||3,224.7||+0.9%
Deal of the Day: Chase is now offering a $200 cash bonus when opening a Total Checking Account. No minimum deposit and all deposits are FDIC insured up to the $250,000 per depositor maximum.
A Mixed Week
Both the Dow Jones and S&P 500 had decent weeks, but we saw the NASDAQ fall off its hot streak and slip as tech stocks had a bit of a troublesome week. Surprisingly, industrial stocks did well last week. And further building off of the “boring” stock trend, value stocks also did well last week, outperforming their growth stock counterparts.
While this doesn’t tell us a lot, it suggests that companies with solid financials, little debt, and a good business model can potentially weather the storm of a pandemic. At least this data would suggest so. Experts don’t necessarily agree consistently, however. Regardless, keep an eye on the market as always, but I would recommend taking a deeper look into value investing if you haven’t already.
Banks Are Hurting
Last week, Q2 earnings season opened up, starting with the major banks. Six of them–including JP Morgan Chase, Citigroup, and Goldman Sachs–stated that their quarterly earnings had been hit pretty hard. These companies also stated they set aside a combined $31 billion to help offset loan losses as a precautionary measure.
We expected banks and other companies to be hit by the pandemic. Companies like J. Crew, JCPenney, and Brooks Brothers in the retail space have all filed for bankruptcy, and now the big banks are bracing for a bigger hit, too. Losses are one thing, but the $31 billion set aside for anticipated loan losses is worrisome.
Unemployment Claims Still High
More than 1 million people filed for unemployment last week, making it the 17th week in a row this has happened. This most recent report showed 1.3 million claims for unemployment, which is a lot, but still far less than what we saw back in March and April. Still, though, experts feel there’s uncertainty in the job market and it could be a much longer road to recovery than many expected a month or so ago.
Consumer Confidence Drops
The University of Michigan ran their Consumer Confidence Index survey and it showed a decline in overall confidence, based primarily on rising cases of COVID-19. The decline was enough to erase the gains we’d seen over the past two months in the survey. Richard Curtin, the chief economist of the sentiment survey stated that “Unfortunately, declines are more likely in the months ahead as the coronavirus spreads and causes continued economic harm, social disruptions, and permanent scarring.”
A Second Stimulus?
Talks of a second stimulus are heating up. At the end of July, extended unemployment benefits are scheduled to come to an end–which may put more pressure on the Senate to approve a second stimulus package to help bring stability to the economy. According to Chad Stone, chief economist at the Center on Budget and Policy Priorities, “If policymakers don’t act this week to extend the increased benefits, they will expire while unemployed workers and the economy need substantial support.” While we still don’t know what will happen here, we recommend a few tips to create your own stimulus in the meantime.
Invest Your Money
Tired of trying to time the market? Let a robo advisor do the work for you. Below is a list of the best robo advisors and a brief description on which type of investor each one is best for.
|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|