US Equities continued to march higher last week, flirting with all-time highs, amid ongoing economic data supportive of US labor markets. Despite a stall in additional fiscal stimulus talks in Washington, the S&P 500 increased 0.6% for the week and is now up 4.4% for the year. The Nasdaq ticked up 0.1% for the week to bring its gains for the year to 22.8%, while the Russell 2000 (small-cap stocks) rose 0.6% for the week but remains down 5.4% for the year.
Global Equity Markets rallied notably last week despite increasing concerns out of Europe of a second wave of the coronavirus. Developed Markets were up 2.3% for the week thanks to a meaningful move higher in Japan. For the year, Developed Markets remain down 6.7%. Emerging Markets increased 0.4% for the week and are now only down 1.9% for the year.
US Interest Rates rose notably last week thanks to encouraging US economic data. Specifically, initial jobless claims declined to 963K for the prior week, much better than expected and the first time that claims have been below 1 million in the last 22 weeks. Retail Sales ex autos for July were up 1.9%, also better than expected, and measures of consumer sentiment in early August rose slightly from July. As a result, the yield on the 10-Year US Treasury rose to 0.71% from 0.57% the prior week.
Of Interest to Us
US corporate earnings have come in better than feared for the second quarter. With the vast majority of companies having reported their results, 83% of companies exceeded earnings estimates while 64% beat sales forecasts. Both are much better than historical norms. Overall, earnings for the quarter declined approximately 32%, well ahead of forecasts in early July of down roughly 45%.
for the week ending 8/14/2020
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