After touching all-time highs again early in the week, US Equity Markets sold off sharply amid significant profit-taking, especially among the mega-cap Technology stocks. As a result, the S&P 500 declined 2.3% for the week to reduce its gains for the year to 6.0%. The Nasdaq fell 3.3% for the week though still remains up 26.1% for the year, while the Russell 2000 (small-cap stocks) dropped 2.7% for the week and is down 8.0% for the year.
Global Equity Markets followed the US lead, with profit-taking across the board with declines in Technology leading the way. Developed Markets fell 2.2% for the week and are now down 8.1% for the year. Emerging Markets decreased 2.0% for the week, hurt as well from a notable 8% drop in energy prices. For the year, Emerging Markets are now negative, down 1.4%.
US Economic Data was positive last week, buoyed by strong employment-related numbers. Payroll gains for August totaled 1.37 million, as furloughed workers increasingly were called back to work. The Unemployment Rate for August dropped to 8.4% from 10.2% in July. Measures of US Manufacturing activity and US Services activity both showed continued expansion in August and exceeded market expectations.
Of Interest to Us
The month of September is historically the weakest month for equity market returns. From 1980 to 2019, the average return for the S&P 500 in the month of September is -0.70%. By contrast, April is historically the best month for market returns, with the S&P 500 up an average of 1.51%.
for the week ending 9/4/2020
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