THE WEEK ON WALL STREET
A late week sell-off sent stocks broadly lower as investors took some profits after stocks reached all-time highs earlier in the week.
The Dow Jones Industrial Average slid 1.82%, while the Standard & Poor's 500 slumped 2.31%. The Nasdaq Composite index dropped 3.27% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, fell 0.62%.1-3
Gravity Reasserts Itself
Stocks hit a wall late last week as the technology companies, which had led the market higher, slipped in Thursday and Friday trading, dragging down the overall market.
The week began on an upbeat note as August momentum continued into the start of September. While participation in the rally on Tuesday and Wednesday was fairly broad, technology stocks continued to be the focus of market strength. But that sentiment changed quickly on Thursday.
With little warning and no obvious catalyst, it remains unclear whether the technology selloff last week was the result of market technicals or a fundamental change in investor outlook. The coming weeks may provide some clarity in this regard.
Labor Market Recovery Sputters Forward
Last week saw a series of employment-related reports that evidenced a continued labor market recovery.
The Automated Data Processing (ADP) employment survey showed that private payrolls increased by 428,000 in August, falling short of consensus expectations of over 1.1 million. News turned more positive as new jobless claims checked in at 881,000-an improvement from the over one million new claims the prior week. Americans receiving unemployment declined by 1.24 million to 13.3 million-half the peak number in May.4,5,6
Finally, the monthly jobs report indicated that nearly 1.4 million non farm jobs were added last month, with the unemployment rate declining to 8.4%. The progress was predominantly attributable to government hiring, primarily of new Census workers, though the retail, leisure and hospitality sectors saw gains in new hiring.7
BY THE NUMBER$
THE MOST PAID - The maximum Social Security benefit paid to a worker retiring at full retirement age in 2020 is $3,011 per month, triple the $975 per month maximum benefit paid 30 years ago (source: Social Security). The maximum benefit may be increased by delaying benefits until age 70.
ARE WE PLAYING? - Of the 130 FBS college football teams (Football Bowl Subdivision), 76 are playing a fall 2020 schedule while 54 teams are not playing (source: NCAA).
DEFEATED WITHOUT A GAME - The AP college football preseason top 25 rankings include 9 teams that will likely not play a fall 2020 schedule, including # 2 ranked Ohio State and # 7 ranked Penn State (source: Associated Press). 8
THE WEEK AHEAD: KEY ECONOMIC DATA
Wednesday: Job Openings and Turnover Survey (JOLTS).
Thursday: Jobless Claims.
Friday: Consumer Price Index (CPI).
Source: Econoday, September 4, 2020
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Tuesday: Lululemon (LULU), Coupa Software (COUP), Slack Technologies (WORK).
Thursday: Chewy (CHWY), Peloton (PTON).
Friday: Kroger (KR).
Source: Zacks, September 4, 2020
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
THE WEEKLY RIDDLE
If it were two hours later than right now, it would be half as long until midnight as it would be if it were an hour later than right now. What time is it?
LAST WEEK'S RIDDLE: There is a kind of sweet bean that never grows in a garden. What is it?
ANSWER: Jelly Bean.