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Market Commentary: Unemployment Continues Slow Recovery as U.S. Corporations Beat Earnings Expectations

Market Commentary

Market Commentary: Unemployment Continues Slow Recovery as U.S. Corporations Beat Earnings Expectations

The lack of progress on a federal stimulus bill weighed on markets last week while economic and earnings data provided investors some good news. Initial unemployment claims finally dipped below 800,000. The improvement and adjustments to previous weeks’ estimates suggest the labor market is continuing to recover. Corporate earnings also provided a positive surprise. While many companies are still to report, initial results show 84% of S&P 500 companies are beating estimates.

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Market Commentary: Retail Sales Spike, but Unemployment Claims Still on Rise

Market Commentary

Market Commentary: Retail Sales Spike, but Unemployment Claims Still on Rise

Retail sales rebounded as U.S. consumers continued to put salaries and money left over from the CARES Act into the economy. Retail and food service sales surged 1.9%, more than doubling expectations of 0.8%. The gains raised overall retail sales 5.4% above year-ago levels as consumers make up for consumption lost during the early days of social distancing (Figure 1).

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Market Commentary: Stocks Rallied in Hopes of Potential Stimulus Package

Market Commentary

Market Commentary: Stocks Rallied in Hopes of Potential Stimulus Package

U.S. stocks rallied on expectations that a stimulus package will be passed in the coming months and additional packages will be easier to pass. The Trump administration offered proposals closer to the most recent Democratic offer. Even if no deal is reached prior to the election, polls suggest the Democratic Party may control the presidency and both houses of Congress. One-party control makes it significantly easier to pass legislation.

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Market Commentary: Markets Face Uncertainty as Economy Recovers, Tension Grows in Washington

Market Commentary

Market Commentary: Markets Face Uncertainty as Economy Recovers, Tension Grows in Washington

Politics created the biggest market headlines last week. Investors wrestled with the tone of the presidential debate and how it contributes to political uncertainty. Stimulus negotiations between the House and the Trump administration narrowed the gap between the two parties, but they were unable to produce a deal. The president contracting COVID-19 contributed to the sense of uncertainty.

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Market Commentary: S&P Continues Decline, but Home Sales on the Rise

Market Commentary

Market Commentary: S&P Continues Decline, but Home Sales on the Rise

The S&P 500 declined for the fourth straight week. On Wednesday, the index of large U.S. companies had declined just more than 9.5% but rallied late in the week. The S&P 500 is 7.8% below its Sept. 2 high. The four-week decline has matched the characteristics of a price adjustment after a large run-up in markets.

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Market Commentary: Restaurants are Rebounding, but S&P Still Lags

Market Commentary

Market Commentary: Restaurants are Rebounding, but S&P Still Lags

Retail sales figures continued a string of economic data pointing toward slowing growth accompanied by a gradual reopening of state economies. Consumers seem willing to take some risks. Retail and food service sales rose 0.6% last month. (See Chart 1.) Increased sales at restaurants contributed most to the monthly gains.

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Market Commentary: The S&P fell for the Second Week Straight and Inflation Rises

Market Commentary

Market Commentary: The S&P fell for the Second Week Straight and Inflation Rises

Stocks continued to retreat as losses on Tuesday were large enough to push the market down more than 2% for the second week in a row. The S&P 500 has retraced 6.7% of its massive rally from the lows in March.

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Market Commentary: Sharp Decline in S&P 500 Could Signal More Volatility

Market Commentary

Market Commentary: Sharp Decline in S&P 500 Could Signal More Volatility

Investors were reminded stock investing comes with volatility as the S&P 500 dropped 3.5% on Thursday and declined 2.3% for the week. The downside pressure was felt most directly by stocks that had performed best. Figure 1 shows the best performing stocks this year (furthest to the right) lagged during the downturn (closest to the bottom).

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Market Commentary: Higher Inflation Expected in Coming Years, S&P Sees More Gains

Market Commentary

Market Commentary: Higher Inflation Expected in Coming Years, S&P Sees More Gains

The Federal Reserve announced a major policy revision last week. The revised strategy indicates rates will stay low for a long period of time and will increase slower than in past rate cycles. The report and a subsequent speech by Fed Chair Jay Powell indicate the Fed will allow inflation to move above its 2% target to make up for periods when inflation has been less than 2%.

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Weekly Market Commentary: The S&P Sets Recovery Records, Housing Market Showing Gains

Market Commentary

Weekly Market Commentary: The S&P Sets Recovery Records, Housing Market Showing Gains

The S&P 500 continued to march higher, rising 0.8% last week. Excluding dividends, the index of large-cap U.S. stocks reached a new record. Some investors prefer this measure for determining when bear markets end. By almost any measure, the S&P 500 is no longer in a bear market.

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