Week from 10 to 16 August 2020
The S&P 500 edged closer to the 3,400 resistance zone (3,372.85, +0.64% week-over-week, its third straight weekly gain) without topping its all-time intraday high of 3,393.52 hit in mid-February. However, U.S. equity markets actually wavered throughout the week. The Nasdaq ended nearly flat (+0.08%) as investors trimmed some tech holdings such as Facebook (-2.68%), Netflix (-2.44%), and Microsoft (-1.83%), in favour of value stocks. By contrast, the Dow Jones rose 1.81%. Among the 11 S&P sectors, industrials (+3.10%), energy (+2.28% thanks to a new jump in oil prices – WTI crude up 1.92%/$42.01 a barrel), consumer discretionary (+1.56%), materials (+1.53%), and financials (+1.29%, helped by a move higher in bond yields –> 10-year U.S. Government bonds closed +14bp/0.71%) led the pack. Conversely, utilities (-2.08%), real estate (-1.82%), communication services (-0.25%) and IT (+0.10%) lagged behind.
U.S. retail data on Friday showed slower growth in July (1.2%), suggesting that new Covid-19 cases had likely weighed on domestic demand. Nevertheless, Wall Street found some support with the executive orders signed by President Trump to partly restore unemployment benefits after White House negotiators failed to reach a deal with congressional Democratic leaders on new stimulus. Furthermore, the U.S. Labor Department reported that 963,000 Americans filed initial claims for unemployment insurance last week, i.e. below 1 million for the first time since March.
Asian equity markets closed mixed (NIKKEI 225: +4.30%, KOSPI: +2.37%, S&P/ASX 200: +2.02%, NIFTY 50: -0.32%, and Shanghai Composite: +0.18%), with President Trump continuing to put pressure on Chinese tech giants. U.S.-China trade talks initially scheduled over the weekend have been postponed indefinitely.
Lastly Europe was higher across the region (MSCI EMU: +1.55%).
In credit markets, investment grade bonds broke their six-week winning streak (-0.07% in Europe, -0.84% in the U.S.). High yield bonds were up in Europe (+0.45%) and down in the U.S. (-0.60%). Emerging debt inched up (+0.14% in local currencies).
Last but not least, precious metals lost ground, gold and silver falling 3.64% and 6.55% respectively.
Find the full report: https://www.trackinsight.com/en/weekly-flow-report/2020-08-14/global