US Stock Markets Ended August 14, 2020

Bob Carey
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US Stock Markets Ended August 14, 2020

Posted Under: Weekly Market Commentary

Last week, equities were positive as value names led the way. The S&P 500 index was up 0.69% while the S&P 500 Value index was up 0.91% and the S&P 500 Growth index returned 0.55%. Top performers in the S&P 500 index were cruise providers Royal Caribbean Cruises LTD and Norwegian Cruise Line Holdings along with gaming/hotel titans Wynn Resorts LTD and MGM Resorts International. These names benefited from the 7-day average positive COVID-19 tests falling to 54,503 on Friday, down from 69,190 high on July 25th a ~22% reduction. Earnings season wound down as only 13 names in the S&P 500 announced quarterly results. Among those announcing quarterly results was Simon Property Group one of the largest mall REIT's. Simon announced earnings that beat analyst estimates along with positive guidance that pushed the stock up 9.6% last week. Simon also finalized plans, along with partners, to buy retail brands Brooks Brothers and Lucky Brand. Further, the Wall Street Journal reported a possible deal where Simon and Brookfield Property Partners are negotiating to purchase J.C. Penny's retail operations out of bankruptcy. Royal Caribbean announced poor quarterly results but managed to rally 16% after surprising with strong 2021 bookings that buoyed the chances of a return to profitability by next year. They also laid out a sizable liquidity cushion that should keep the company solvent for 14-16 months even with little improvement in demand. Cisco Systems Inc. fell over 10% last week after announcing poor quarterly results due to hardware sales falling 16% as customers delayed orders. CEO Robbins: "As you move down the customer stack, things just get weaker and weaker as the customers get smaller and smaller because they just don't have the financial wherewithal." Robbins statement underscores some of the financial weakness many small/mid-size firms are feeling from this pandemic and economic shutdown.

Posted on Monday, August 17, 2020 @ 8:20 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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