Weekly Market Commentary

A weekly market review for the week ending September 18, 2020

Stocks

Stocks ended the week mixed as investors seemed to be optimistic about a COVID-19 vaccine, however more cautious on how effective the Federal Reserve’s monetary policy is having on the recovery. The rotation from growth to value stocks was also apparent last week as technology companies continued their decline. There were also multiple mergers last week, with COVID-19 vaccine candidate Gilead Sciences acquiring Immunomedics for $21 billion. Also, chipmaker giant Nvidia purchased ARM Holdings for $40 billion, furthering its market share in the space. The Chinese-owned social media app TikTok was also in the spotlight last week as it was reported that Oracle had reached an agreement to operate the company in the U.S., however, it remained unclear on exactly how much control Oracle would have. Regarding a vaccine for COVID-19, investors were optimistic after reports from Pfizer stated they would begin distributing a vaccine by year-end. AstraZeneca also announced the resumption of its leading vaccine trials in the U.K. Year-to-date, the S&P 500 and Russell 2000 have returned 2.75% and -7.89%, respectively.

Bonds

The post-meeting statement on Wednesday from the Federal Reserve last week weighed on investor sentiment and seemed to drain the week’s gains in equities. Policymakers are expecting short-term interest rates to remain near 0% through 2023 and even reduced their expectation for the economic contraction in 2020 from 6.5% to 3.7%. The part that seemed to trouble investors was the lack of detail in the Fed’s economic guidance going forward, coupled with the fear that the mass amounts of stimulus pumped into the economy has reached its full effect. Weekly continuing and jobless claims came in at 12.6 million and 860,000, respectively. Investors seemed to be more risk-averse last week as the yield on the 10-year Treasury ended higher for the week. Year-to-date, U.S. Treasuries and Investment-Grade Corporates have returned 8.82% and 7.33%, respectively.

Index Performance Ending August 18, 2020

index-performance-9-18-2020

This material has been prepared by Investment Consulting Services and is not to be relied on as a forecast, research, or investment advice.  The material is intended for informational purposes only.  The opinions expressed are as of September 22, 2020 and are not guaranteed to be accurate.  No warranty of accuracy or reliability is given and no responsibility for errors and omissions is accepted by Investment Consulting Services, LLC., its officers, or its employees.  Data has been obtained from sources considered to be reliable, but its accuracy and completeness cannot be assured and is subject to change without notice.  Past performance is not a guarantee of future results.

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