In a holiday-shortened week, stock prices turned higher as encouraging economic data outweighed an increase in COVID-19 cases and a rollback in economic re-openings.
The Dow Jones Industrial Average rose 3.25%, while the Standard & Poor’s 500 increased by 4.02%. The Nasdaq Composite Index gained 4.62% for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, picked up 0.22%.1,2,3
The Quarter in Brief
What’s to Come
All three of the big Wall Street benchmarks recorded their best quarters of the century. The Nasdaq Composite closed at 10,020.35 on June 10, reaching a new milestone. The Nasdaq ended Q2 at 10,058.77; the S&P, at 3,100.29; the Dow Jones Industrial Average, at 25,812.88.5,6
As this quarter starts, investors are wondering… is the worst of this recession now behind us? A quick answer may prove elusive. The third quarter may bring more signals that Main Street is bouncing back, but it could also bring a reversal of economic momentum if states continue to halt or reverse phases of opening. For the market to climb higher off of its Q2 melt-up, earnings and economic indicators have to keep showing improvement or least stability. The same goes for COVID-19 case counts. If they keep rising this summer, the bulls could easily be held back.
Jobs, Jobs, Jobs
First, the ADP (Automatic Data Processing) National Employment Report, which reported private-sector employers added 2.37 million jobs in June. Next, an update on jobless claims, which showed 1.43 million claims, slightly higher than estimates. And finally, the June employment report from the Bureau of Labor Statistics, which showed 4.8 million jobs added, and the unemployment rate falling to 11.1%. Both numbers were better than expected.7,8,9
While the employment numbers painted a mostly positive picture, it’s important to remember that the June wave of rehiring was prior to the increase in COVID-19 cases, which has caused some states to revisit their re-opening plans.
THIS WEEK: KEY ECONOMIC DATA
Source: Econoday, July 2, 2020
THIS WEEK: COMPANIES REPORTING EARNINGS
Source: Zacks, July 2, 2020
1. The Wall Street Journal, July 2, 2020
2. The Wall Street Journal, July 2, 2020
3. The Wall Street Journal, July 2, 2020
4. CNBC.com, June 30, 2020
5. CNBC.com, June 30, 2020
6. The Wall Street Journal, June 30, 2020
7. MarketWatch, July 1, 2020
8. CNBC, July 2, 2020
9. The Wall Street Journal, July 2, 2020
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Weekly Market Insights: Quarterly Report
July 07, 2020