US Stock Markets Ended June 12, 2020

Bob Carey
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US Stock Markets Ended June 12, 2020

Posted Under: Weekly Market Commentary

Last week, equities fell for the first time in four weeks. Early last week, cyclicals continued to run from the week before. On Thursday however, risks of a second wave of COVID-19 cases sent the S&P 500 down over 6.8% as investors shed risky cyclical names for relative safety in Information Technology and Communication Services. Friday cyclicals made a slight comeback, but still ended the week negative as Energy, Financials and Industrials were the worst three sectors in the S&P 500. Value was the poorest performing factor last week and Momentum was the top followed closely by low volatility. Overall, factors remain highly volatile as stock markets continue to iron out the full effect of the COVID-19 recession. An updated Fed dot plot shows interest rate expectations near zero thru 2022. The Federal Reserve is also continuing its large-scale asset purchases trying to mitigate damage to the labor market. Starbucks issued preliminary earnings guidance with 3Q well below consensus estimates and guided 4Q ahead of estimates. They also announced a plan to close 400 stores over the next 18 months which led to a -7% return last week. Grubhub and Netherland based Just Eat Takeaway announced the two companies will be merging in an all stock transaction. Grubhub had been in talks to combine with Uber but GRUB's CEO said the JET offer was 'much higher' than the Uber proposal. Looking ahead to next week, expect equity markets to trade along with the anticipated speed of reopening the U.S. economy. There will likely be some market moving economic news in retail sales, jobless claims, housing starts and building permits as equity markets continue to try and price in just how fast an economic recovery can take place.

Posted on Monday, June 15, 2020 @ 8:19 AM • Post Link	Share:
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.

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