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US Stock Markets Ended Sept. 4, 2020
Last week was the worst week for equities since June. Last week's return was -1.00% for the S&P 500 Value index which bested the -3.07% return for the S&P 500 Growth index. Utilities and Materials were the only two sectors that were positive, while Energy and Technology both returned worse than -4%. According to the St Louis Fed, their 5-year inflation expectation hit a high for the year at 1.91% which helped to spur Materials as the top performing sector. The three best materials names in the S&P were Eastman Chemical Co., LyondellBasell Industries and International Paper Co. all returning over 5% last week. Inflation expectations couldn't help support oil prices as Crude fell from $42.97 to close the week below $40 for the first time since July. Energy names HollyFrontier Corp. and Diamondback Energy Inc. both tumbled over 10% last week as energy prices depressed the expected future profitability in the names. There were twelve information technology stocks that returned worse than -6% last week. During trading on Friday, the high growth technology trade was in full meltdown after the Nasdaq 100 index started down 5.34% before retracing most of those losses as the index closed down 1.27% for the day. There were some reopening trades that were positive last week. Carnival Corp. and Norwegian Cruise Line Holdings rallied 7.67% and 4.13% respectively, after news broke that Italy based Costa Cruises will resume operations starting Sunday. Walmart Inc. returned 1.80% last week after announcing an unlimited delivery service called "Walmart Plus" to compete against Amazon Prime. It is expected to have 2,700 stores offering same-day delivery later this month. Beverage conglomerate Brown-Forman Corp. rallied 9.10% last week after announcing earnings that bested market expectations on sales that grew 3% when analysts had estimated -5% sales growth. Despite the poor week in equities, the S&P 500 index is still above where it was only two weeks ago. Consider dips like this an opportunity to assess your market allocations and an opportunity to buy assets at lower valuations.
Tuesday, September 8, 2020 @ 8:28 AM
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.