US Equity Markets fell for the fourth consecutive week last week on growing unease that the spike in coronavirus cases in Europe could be a precursor to what happens in the US. The S&P 500 dropped 0.6% for the week to bring its gains for the year to 2.1%. The Nasdaq actually bounced back from its recent sharp declines, up 1.1% for the week, and is now up 21.6% for the year. The Russell 2000 (small-cap stocks) declined a meaningful 4.0% for the week and is now down 11.6% for the year.
Global Equity Markets decreased notably last week thanks to a surge in COVID-19 cases in Europe that led to discussions of new shutdowns across the continent. As a result, Developed Markets dropped 4.0% for the week and are now down 10.1% for the year. Emerging Markets declined 4.5% for the week to bring its losses for the year to down 5.0%.
The Capital Goods sector of the US Economy continues to rebound. New orders for US manufacturers in August increased for the fourth consecutive month and rose to the highest level in over ten years. This is an encouraging sign in the rebound for US manufacturing activity following the significant declines in March and April.
Of Interest to Us
With the S&P 500 down for four consecutive weeks, what does history tell us will happen the 5th week? A four-week decline has occurred 102 times in history, and the average return for Week 5 has been 0.30%. Week 5 has been positive 61% of the time and, when Week 5 is up, the average positive return is 2.3%. Week 5 has been down 39% of the time and, when it is down, the average decline is 2.8%.
for the week ending 9/25/2020
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