September 28 – October 2 Week in Review
Stocks were back in rally mode last week. The S&P 500 rose 1.5% and the Dow Jones Industrial Average gained 1.9%, snapping four week losing streaks. The Nasdaq Composite performed comparably with a 1.5% gain. The real winner was the small cap Russell 2000 with a 4.4% gain for the week.
Ten of the 11 S&P 500 sectors finished in positive territory. The real estate, financials, utilities, and consumer discretionary sectors outperformed. The energy sector was the lone holdout, as sentiment was pressured by an 8% decline in crude prices amid growth/demand concerns.
The market had already established the week's gains by the time Friday rolled around, largely on technically oriented trading activity in oversold stocks. Early in the week, cyclical stocks benefited from M&A activity, better than expected economic data, analyst upgrades, and some stimulus optimism.
The mega-cap stocks also participated in last week’s rebound, with the market shaking off any residual weakness that followed the first presidential debate on Tuesday. Friday, however, is when the real news flowed in and the mega-caps sold off to end the week.
On Friday it was announced that President Trump tested positive for COVID-19, September nonfarm payrolls increased by 661,000 and there were indications that a fiscal relief bill could soon be reached. The latter remains a real issue, but value/cyclical stocks did benefit from the hopeful sounding news reports.
Highlighting other key economic reports from last week, jobless claims remained elevated at 837,000 for the week, personal income declined 2.7% in August, and the ISM Manufacturing Index for September decelerated to 55.4% from 56.0% in August.
In the bond market U.S. Treasuries finished lower on the longer end of the curve. The 2 year yield was flat at 0.13%, and the 10 year yield increased four basis points to 0.70%.
In other markets the U.S. Dollar Index fell 0.9% to 93.84, WTI crude closed at $37.05 a barrel and gold closed at $1,904.50 an ounce.
October 2 – October 5 Economic Calendar