US Stock Markets Ended Sept. 18, 2020

Declines in mega-cap technology shares led stocks lower for the third consecutive week, capping another week of heightened volatility as the market searches for leadership. Despite the lack of a new stimulus package from Congress and the Federal Reserve calling the economic outlook "highly uncertain", investors have started to rotate into more cyclical areas of the market over the last few weeks at the expense of technology shares. Economic data continues to improve but at a slower pace. Industrial production increased by 0.4% in August versus 3% last month and retail sales improved by 0.6% versus 1.2% in the last reading. As a sign of the times, shares of Snowflake Inc. surged over 100% above its initial public offering price and closed the week with a market capitalization close to $66 billion. The cloud data warehouse vendor made history as the biggest initial public offering for a software name. Despite a strong beat and good guidance, shares of Adobe Inc. fell as investors took profits. Shares of FedEx Corp. surged following a strong quarter as E-commerce drove revenue higher by 36%. In addition, margins improved due to increased volume, lower fuel costs and package surcharges. Looking ahead, market volatility is likely to remain elevated as we come closer to the election and vaccine trial data is released. Both are likely to drive binary outcomes. In our view, a well-diversified portfolio that is spread across sectors, stocks and styles is prudent during the current uncertainty.
Posted on Monday, September 21, 2020 @ 8:27 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.