Market Recap

May 25, 2020

 

It was a good week for stock markets in the United States, but there was trouble in Asia.

 

U.S. stock markets rallied last week. The Dow Jones Industrial Average, Standard & Poor’s 500 Index, and Nasdaq Composite all gained more than 3 percent, reported Ben Levisohn of Barron’s.

 

Investors had plenty of fuel for optimism early in the week. On Sunday, Federal Reserve Chair Jerome Powell struck a positive tone during his 60 Minutes interview stating, “The big thing we have to avoid…is a second wave of the virus. But if we do, then the economy can continue to recover. We'll see GDP move back up after the very low numbers of this quarter. We'll see unemployment come down. But I think though it'll be a while before we really feel well recovered.”

 

On Monday, there was news early testing of a potential vaccine had delivered promising results, and the vaccine company’s stock shot higher. The report was tarnished when top executives sold shares the next day, and a respected medical website indicated the published results meant little, reported John Authers in Bloomberg Opinion.

 

Positive momentum slowed later in the week when China indicated it will impose national security laws on Hong Kong. Reshma Kapadia of Barron’s reported, “While the risks have ratcheted higher, it isn’t clear yet whether the new security laws will destroy Hong Kong’s ability to act as a financial center. What that could mean for investors will probably play out over the next couple of months.”

 

Hong Kong’s Hang Seng index closed down 5.6 percent, reported Financial Times (FT). That was the index’s worst one-day performance in almost five years.

 

China’s leadership also declined to set a gross domestic product (GDP) target for the first time ever. GDP is the value of all goods and services produced in a nation. The decision led to a decline in mainland China’s CSI 300 index of Shanghai and Shenzhen-listed stocks, reported FT.

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* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

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* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

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Sources:

https://www.barrons.com/articles/the-stock-market-just-had-a-great-week-why-its-time-to-worry-51590190696?refsec=the-trader (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/05-26-20_Barrons-The_Stock_Market_Just_had_a_Great_Week-Why_Its_Time_to_Worry-Footnote_1.pdf)

https://www.cbsnews.com/news/full-transcript-fed-chair-jerome-powell-60-minutes-interview-economic-recovery-from-coronavirus-pandemic/

https://www.bloomberg.com/opinion/articles/2020-05-20/moderna-vaccine-fiasco-shows-power-of-stock-market-narratives

https://www.barrons.com/articles/chinas-hard-line-on-hong-kong-what-it-means-for-u-s-investors-51590166402 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/05-26-20_Barrons-Chinas_Hard_Line_on_Hong_Kong_Could_Mean_Big_Changes_for_Investors-Footnote_4.pdf)

https://www.ft.com/content/39a589dc-0af8-4ee7-ad92-b19df91cb06b (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/05-26-20_FinancialTimes-Stocks_Stumble_as_Investors_Contend_with_Tension_Over_Hong_Kong-Footnote_5.pdf)

https://www.fedsmallbusiness.org/medialibrary/FedSmallBusiness/files/2020/covid-brief

https://www.barrons.com/articles/americas-small-businesses-are-sputtering-why-that-matters-for-the-economy-51590141602?mod=hp_HERO (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/05-26-20_Barrons-Small_Businesses_are_the_Key_to_Reviving_the_Economy-They_Face_an_Existential_Threat-Footnote_7.pdf)

https://www.nber.org/papers/w26989.pdf (Abstract and page 4)

https://www.cnbc.com/2020/04/13/coronavirus-update-here-is-everything-the-fed-has-done-to-save-the-economy.html

https://diff.substack.com (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/05-26-20_TheDiff-V-Shaped_Recovery_for_Me_L-Shaped_for_Thee-The_Aftermath-Footnote_10.pdf)

https://time.com/4845150/chief-justice-john-roberts-commencement-speech-transcript

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Parks Wealth Management

 

Office: (201) 689-2020

Fax:(201) 689-6850

 

216 East Ridgewood Ave 
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Ridgewood, NJ 07450

info@parkswm.com

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