We hope you are all doing great and having a wonderful start to your week. It is time for our market update.
For the week of July 6th – 10th, the major market indexes finished as the following:
- DJIA – up 1.0%
- S&P 500 – up 1.8%
- NASDAQ – up 4.0 %
Yet another strong week in the market recovery was led, once again, by the tech and consumer discretionary sectors. The market has posted two weeks of positive results in a row. A continued rise in COVID-19 cases has tempered some of the market recovery in recent weeks, but news of vaccine progress and hope has provided some needed fuel to the market. The 10-year U.S. Treasury yield, last week, fell to 0.62%, the lowest level since April. Lower yields have also dropped the 30-year Treasury to 1.28%, flattening the yield curve, and could lead to a curb in inflation expectations as investors are seeking a higher long-term rate on bonds.
For the year, through July 10th:
- DJIA – down 7.4%
- S&P 500 – down 0.4%
- NASDAQ – up 18.9%
The S&P 500 has been boosted by its largest weighted holdings in the market, mostly tech and consumer discretionary. Year-to-date, consumer discretionary is up 14.8% and tech is up 18.8%. These sectors continue to make up for the struggles in the financial (down 22.6%) sector and the energy (down 39.2%). Since recent market lows on March 23rd, the NASDAQ has risen by nearly 59%. As second-quarter earnings begin getting reported later this month, look for the S&P 500 to respond as the earnings are expected to be down more than 40% from the second quarter of 2019. A better than expected second-quarter could continue to propel the market back to positive territory but there is certainly cause for caution.
Ahead, this week in the market, look for new details on a second stimulus package to start circulating in the news as the Treasury Secretary, Steven Mnuchin has stated that he expects to see the Senate approve another bill later in July. Additionally, the continued rise in COVID-19 cases, could slow down the recovery of the DJIA and the S&P 500. It is worth noting that the S&P 500 could turn positive for the year with as little as a 0.5% overall return in any one day or by the end of this coming week.
As always, if there is more information we can provide, or additional detail we can go into, please let us know.