August 24 – August 28 Week in Review

Last week marked the fifth straight weekly gain for the S&P 500 and Nasdaq Composite, which ended the week higher by 3.3% and 3.4%, respectively. Both set new record highs while the Dow Jones Industrial Average turned positive for the year with a 2.6% gain. The small cap Russell 2000 increased 1.7%.

Financial stocks were among the week's biggest winners, benefiting from some curve-steepening activity after Fed Chair Powell outlined a shift towards an average inflation target. Under the new framework, the central bank would allow PCE inflation to run moderately beyond 2.0% over time to make up for years when it ran below 2.0%.

Commentary 08.31.20

The S&P 500 500 financials sector rose 4.4%, following closely behind the communication services and information technology sectors atop the standings. Only the utilities sector closed lower.

Sprinkled throughout the week last week were positive coronavirus updates: the FDA approved emergency use authorization for convalescent plasma in hospitalized COVID-19 patients, Abbott Labs received emergency use authorization from the FDA for its $5.00, 15-minute COVID-19 antigen test, and Moderna said its COVID-19 vaccine generated a promising immune response in ten elderly patients.

The latest gauge on consumer confidence offered a more pessimistic perspective. The Conference Board's Consumer Confidence Index dropped to 84.8 in August from 91.7 in July for its lowest reading since May 2014.

Microsoft and Walmart rose more than 6.5% last week, helped by reports that the companies are teaming up to possibly acquire TikTok’s U.S. business. Facebook rose 10.0% in what can be best described as purely a momentum trade.

Separately, the Dow will look slightly different starting this week. Salesforce, Amgen, and Honeywell will replace Exxon Mobil, Pfizer, and Raytheon Technologies. In related news Salesforce gained 30% last week, a bulk of those gains coming after its earnings report. Also Apple and Tesla will start trading post-split this week.

In the bond market the 2 year yield was unchanged at 0.15%, while the 10 year yield rose nine basis points to 0.73%.

In other markets the U.S. Dollar Index fell 1.0% to 92.32, WTI crude futures gained 1.6%, or $0.66, to $42.97 a barrel and gold closed at $1,970.50 an ounce.


August 31 – September 4 Economic Calendar

  • Monday
  • Dallas Fed Manufacturing Survey
    10:30 AM ET




  • Tuesday
  • Motor Vehicle Redbook
    8:55 AM ET
  • PMI Manufacturing Final
    9:45 AM ET
  • ISM Manufacturing Index
    10:00 AM ET
  • Construction Spending
    10:00 AM ET


  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • ADP Employment Report
    8:15 AM ET
  • Factory Orders
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  •                         Beige Book
    2:00 PM ET


  • Thursday
  • Challenger Job-Cut Report
    7:30 AM ET
  • Goods and Services Trade
    8:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • Productivity and Costs
    8:30 AM ET
  • PMI Composite Final
    9:45 AM ET
  • ISM Services Index
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
    • Friday
    • Employment Situation
      8:30 AM ET
    • Baker-Hughes Rig Count
      1:00 PM ET





 



PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This commentary is a matter of opinion and is for informational purposes only. It is not intended as investment advice and does not address or account for individual investor circumstances. Investment decisions should always be made based on the client's specific financial needs, goals and objectives, time horizon and risk tolerance. The statements contained herein are based solely upon the opinions of Telemus Capital, LLC. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.

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