Read the 10 stories to remember from the week which ended August 21.
Story #1: US equities record highs
The NASDAQ extended its recent run of setting new record highs as it rose nearly 3%, outperforming the other major indexes as large caps growth continues to massively to outperform value and small caps. The S&P 500 set its own record on Friday, eclipsing its previous peak set six months earlier. The Dow finished the week little changed overall and was about 5% shy of its record.
Story #2: S&P 500 marks fastest recovery from a bear market in history
By common definitions, this marked the fastest recovery from a bear market in history—according to Barron’s and Dow Jones Market Data, the 126 trading days it took for the S&P 500 to reclaim its February peak was over 10 times as fast as the index’s average historical rebound (1,542 trading days).
Story #3: Apple and Tesla record
Apple’s market capitalization climbed above $2 trillion in intraday trading on Wednesday, marking the first time ever that the market value of a company’s total outstanding shares eclipsed that threshold. Shares of Apple climbed further on Friday, pushing its market cap to around $2.1 trillion. Ahead of its stock split, Tesla continues to soar as the stock closed above $2,000 for the first time ever a net short interest continues to plummet.
Story #4: A tough week for “anti-fragile” assets
It was an ugly week for cryptocurrencies as Ethereum had its worst week since early May. Gold closed back below $2000 while Silver continues to consolidate.
Story #:5 Mixed global outlook
Economic activity at U.S. companies has been picking up speed at a faster rate than it has in most other parts of the world. Data released on Friday from purchasing manager indexes showed that U.S. firms are seeing demand return as they reopen from coronavirus-related lockdowns imposed in the spring and early summer. However, Preliminary readings from Eurozone’s PMI suggested that the economic recovery lost momentum in August, driven by flattening growth in the service sector. The composite output index, which combines manufacturing and services, fell to 51.6 from 54.9 in July. In Japan, the economy suffered its largest contraction on record as companies experienced the full impact of the global pandemic. GDP fell 7.8% in the quarter, which equates to 27.8% on an annualized basis, largely due to steep declines in exports and domestic consumer spending. On the positive side, the Reuters Tankan manufacturers' (monthly) sentiment index rose to -33 in August from -44 in July, its best level since February.
Story #6: US Home sales surge
The housing market remains a positive catalyst for the fragile U.S. economy. A report released on Friday showed that sales of existing homes surged nearly 25% in July relative to the previous month and nearly 9% from a year earlier. The results far surpassed economists’ expectations.
Story #7: Persistent US unemployment
After a one-week respite, the weekly total of U.S. unemployment claims climbed back above 1 million, with 1.1 million filings in the latest weekly count. In the previous week, the figure fell to 963,000, ending a string of 20 consecutive weeks in which claims had exceeded 1 million.
Story #8: Cautious Fed
The U.S. Federal Reserve is prepared to extend further support for the U.S. economy, but it’s remaining vague as to when it might take further action. Minutes released from the Fed’s policy meeting in late July showed that board members believed more government spending would be needed to prevent a longer or deeper downturn as many states struggle to contain the coronavirus.
Story #9: Italy, Spain, tighten restrictions as coronavirus cases climb
Cases of the coronavirus surged in Croatia, Slovenia, Malta, Austria, Hungary, France, and Greece. Italy hit a new daily record of cases during the week, while Spain now has the highest number of infections in western Europe, at 370,000. The two countries tightened rules on the use of face masks and closed nightclubs and dancing venues in hotels and beach resorts. The French government said it would make face masks compulsory in workplaces in September, and the UK and Germany put Croatia on their quarantine lists.
Story #10: UK negotiations with EU broke down
The latest round of talks between the UK and the European Union (EU) on the details of their post-Brexit relationship broke up without yielding any breakthroughs on the main sticking points of competition and fishing rights, according to anonymous EU officials cited by the Reuters news agency. The EU has said a deal must be struck in time for approval at an October 15–16 leaders’ summit to enable ratification before the UK’s December 31 exit from the bloc.
(Cover Image Source: VIBZN.com)
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