June 22 – June 26 Week in Review

A rise in new coronavirus cases put the markets on their heels last week as governments and companies were forced to respond. The Dow Jones Industrial Average fell 3.1%, the S&P 500 2.9%, the Russell 2000 2.8%, and the Nasdaq Composite 1.9%.

This week's biggest decliners were the S&P 500 energy, financials, and communication services sectors.

Commentary 6.29.20

Adding fuel to the proverbial virus fire was an onslaught of negative sounding developments that heightened concerns about the strength of a recovery. The U.S. reported daily highs in new coronavirus cases amid an acceleration in younger people getting infected. New York Governor Cuomo announced that the tri-state area will be imposing a 14 day quarantine on travelers coming from coronavirus hotspots. The EU was reportedly considering its own restrictions on U.S. travelers, banning them from entering when it relaxes its border restrictions on July 1. Texas and Florida scaled back reopening efforts. Lastly Apple re-closed stores in Houston and Florida, and Walt Disney postponed the reopening date of Disneyland past July 17.

Re-thinking the reopening strategy could temper the rebounding economic data that have contributed to the market's recovery. The latest May economic data showed new home sales rebound 16.6% month over month to a seasonally adjusted annual rate of 676,000, durable goods orders rebound 15.8%, and personal spending rebound 8.2%.

The re-acceleration of cases also threatens to undo some of the progress in the labor market that the government spent a lot of money to stabilize. Weekly jobless claims for the week ending June 20 decreased by just 60,000 to 1.480 million.

In the financial sector, regulators relaxed some Volcker Rule restrictions, allowing banks to increase their investments in a broad set of venture capital funds. Out of an abundance of caution, though, the Fed will require banks to suspend share repurchases and cap dividend payments in the third quarter as a result of potential losses from the shutdown of the economy.

Separately, social media stocks succumbed to heavy selling at the end of the week after more companies halted ad spending on Facebook, which fell 9.5% last week.

U.S. Treasuries finished the week with modest gains. The 2 year yield declined three basis points to 0.16%, and the 10 year yield declined six basis points to 0.64%.

In other markets the U.S. Dollar Index declined 0.2% to 97.45 last week, WTI crude fell 3.2% to $38.49 a barrel and gold closed at $1,784.80 an ounce.

June 29 – July 3 Economic Calendar

  • Monday
  • Pending Home Sales Index
    10:00 AM ET
  • Dallas Fed Mfg Survey
    10:30 AM ET
  • Tuesday
  • Redbook
    8:55 AM ET
  • S&P Corelogic Case-Shiller HPI
    9:00 AM ET
  • Chicago PMI
    9:45 AM ET
  • Consumer Confidence
    10:00 AM ET
  • Farm Prices
    3:00 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Challenger Job-Cut Report
    7:30 AM ET
  • ADP Employment Report
    8:15 AM ET
  • PMI Manufacturing Index
    9:45 AM ET
  • SM Mfg Index
    10:00 AM ET
  • Construction Spending
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • FOMC Minutes
    2:00 PM ET
  • Thursday
  • Motor Vehicle Sales
  • Employment Situation
    8:30 AM ET
  • International Trade
    8:30 AM ET
  • Jobless Claims
    8:30 AM ET
  • Factory Orders
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Baker-Hughes Rig Count
    1:00 PM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET

    • Friday

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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