Positive momentum in US Equity Markets continued last week, helped by some positive study data around the drug remdesivir, which has already been approved as a treatment for COVID-19. The S&P 500 increased 1.8% for the week to reduce its losses for the year to down 1.4%. The surge in Technology stocks continued last week, boosting the Nasdaq by 4.0% for the week and notably outperforming every other major index at up 18.3% for the year. The Russell 2000 (small-cap stocks) continues to lag, down 0.6% for the week and down 14.7% for the year.
Global Equity Markets also increased last week, helped by continued European economic data that was better than forecasts and ongoing strength in Asia. Developed Markets rose 0.5% for the week but remain down 11.2% for the year. Emerging Markets rallied another 3.5% for the week thanks to the improving outlook in China. For the year, Emerging Markets are now down 4.1%.
US Economic data shows continued improvements. A key measure of US Services activity, the ISM Services Index, bounced back sharply in June to a level of 57.2 from May's level of 45.4. A reading above 50.0 suggests expanding activity and below 50.0 suggests contracting activity. Initial Jobless Claims for the prior week remain stubbornly high at 1.314 million, but that still was better than forecasts.
Of Interest to Us
While total US spending remains down about 7%, spending by low-income consumers in the US has returned to pre-crisis levels. This is particularly interesting since it was low-income workers that were disproportionately impacted by job losses associated with the coronavirus. Could this be a precursor to greater confidence in US Consumers' outlook that leads to improved spending?
for the week ending 7/10/2020
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