August 31 – September 4 Week in Review

Stocks started last week on the upswing as the S&P 500 notched its 22nd record close of the year, but ultimately succumbed to profit taking later in the week in the growth stocks that have led the markets advance of late.

For the week the S&P 500 fell 2.3%, the Nasdaq Composite fell 3.3%, the Dow Jones Industrial Average fell 1.8%, and the Russell 2000 fell 2.7%.

Commentary 09.08.20

While the profit taking started on Thursday from an index perspective, it really started on Wednesday in Apple, Tesla, and Zoom Video. The day before, shares of Zoom surged 40% after crushing earnings expectations.

The top-weighted information technology sector, which was and still is, this year's best-performing sector, was among this week's laggards amid a 6.4% decline in Microsoft. The energy sector declined the most, while the utilities and materials sectors were spared.

Granted, there wasn't that much profit to take from the beleaguered energy sector, but it continued to get pounded amid weaker oil prices. 

At the end of the week an encouraging Employment Situation Report for August contributed to the relative outperformance of value/cyclical stocks and some curve-steepening activity. For comparison the Russell 1000 Value Index declined 0.3% versus a 3.4% decline for the Russell 1000 Growth index.

The 2 year yield increased one basis point to 0.16%, while the 10 year yield decreased one basis point to 0.72%. Note that the curve-steepening activity on Friday essentially undid the curve-flattening activity from earlier in the week.

The CBOE Volatility Index (VIX) spiked 33.9% to 30.75, as investors assumed some protection against further weakness in equities. Softbank also contributed to the increase in the VIX as it purchased billions of dollars of options according to a story in the Financial Times.

In other markets the U.S. Dollar index rose 0.50% last week to close at 92.92. WTI crude closed at $39.70 a barrel, down 7.6% on the week. Gold closed at $1,940.90 an ounce.


September 7 – September 11 Economic Calendar

  • Monday





  • Tuesday
  • NFIB Small Business Optimism Index
    6:00 AM ET
  • Investor Movement Index
    12:30 PM ET
  • Consumer Credit
    3:00 PM ET



  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Redbook
    8:55 AM ET
  • JOLTS
    10:00 AM ET




  • Thursday
  • Jobless Claims
    8:30 AM ET
  • PPI-Final Demand
    8:30 AM ET
  • Wholesale Inventories (Preliminary)
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • EIA Petroleum Status Report
    11:00 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET


    • Friday
    • CPI
      8:30 AM ET
    • Quarterly Services Survey
      10:00 AM ET
    • Baker-Hughes Rig Count
      1:00 PM ET
    • Treasury Statement
      2:00 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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