Stocks were mixed last week amid a busy week of earnings, some troubling economic data, and seemingly little progress on a new fiscal stimulus package.
The Dow Jones Industrial Average slipped 0.16%, while the Standard & Poor’s 500 increased by 1.73%. The Nasdaq Composite Index surged 3.69% for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, dipped 0.75%.1,2,3
Stocks Buffeted by Crosswinds
Investors were optimistic on Monday about the ability of mega-cap technology companies to thrive in an uncertain economy, but worried on Tuesday about pending Congressional testimony involving the CEOs of these firms.
On the economic front, a strong June durable goods orders report on Monday bolstered investor sentiment. But the optimism faded on a disappointing jobless claims number and a troubling second-quarter GDP number that—while anticipated—was a bit unsettling.4,5,6
Following some exceptional earnings results from the mega-cap technology companies, stocks managed to rally in the final hour of trading on Friday.
U.S. Dollar Continues Its Decline
Conversely, international companies may suffer lower sales in the U.S. as their products become more expensive. It’s a mixed bag of potential outcomes, but Wall Street has become more and more focused on the dollar’s trajectory.
One of the possible reasons is that many traders are away on vacation, resulting in light volume, which may amplify market volatility. But this year, it’s uncertain whether traders will be away on vacation due to the pandemic. Should markets become volatile in the weeks ahead, investors may want to remind themselves of the seasonal trends that may be at work.
THIS WEEK: KEY ECONOMIC DATA
Source: Econoday, July 31, 2020
THIS WEEK: COMPANIES REPORTING EARNINGS
Source: Zacks, July 31, 2020
1. The Wall Street Journal, July 31, 2020
2. The Wall Street Journal, July 31, 2020
3. The Wall Street Journal, July 31, 2020
4. CNBC.com, July 27, 2020
5. CNBC.com, July 30, 2020
6. BEA.gov, July 30, 2020
7. Reuters.com, July 28, 2020
8. CNBC.com, August 31, 2019
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Weekly Market Insights: Stocks Have Mixed Reaction
| August 07, 2020