Stocks were mixed last week as investors reacted to positive economic data, progress on a COVID-19 vaccine, and the continued nationwide increase in COVID-19 cases.
The Dow Jones Industrial Average gained 2.29%, while the Standard & Poor’s 500 rose by 1.25%. But the Nasdaq Composite Index dropped 1.08% for the week. The mega-cap technology companies saw some profit-taking last week, sending the Nasdaq Composite to its first loss in three weeks. The MSCI EAFE Index, which tracks developed stock markets overseas, ended 2.19% higher.1,2,3
Stocks Find a Way Higher
Despite a strong retail sales number, new jobless claims and rising U.S.-China tensions reminded investors that global economic recovery remains fragile, leading stocks to pare some of the week’s earlier gains.5,6
Earnings Season Begins
Three money center banks last week kicked off the earnings season, reporting substantial declines in profits and an additional cumulative $28 billion set aside for loan-loss reserves.7
Banks are an important economic bellwether since they touch every part of the U.S. economy. Although their earnings were significantly lower, they actually beat consensus Wall Street estimates, which encouraged investors and set the stage for stocks to move higher. The story on this quarter’s earnings season, however, is far from finished as investors await the stream of companies releasing their quarterly results in the days and weeks ahead.
THIS WEEK: KEY ECONOMIC DATA
Source: Econoday, July 17, 2020
THIS WEEK: COMPANIES REPORTING EARNINGS
Source: Zacks, July 17, 2020
1. The Wall Street Journal, July 17, 2020
2. The Wall Street Journal, July 17, 2020
3. The Wall Street Journal, July 17, 2020
4. CNBC.com, July 14, 2020
5. WSJ.com, July 16, 2020
6. CNBC.com, July 16, 2020
7. The New York Times, July 15, 2020
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