Economic Market/Portfolio Happenings
Hello and welcome to this week’s Jones Financial Blog! Our goal at Jones & Associates is to help keep you up to date with interesting current economic/market happenings as well as some proprietary portfolio happenings. Knowledge is power and thought we would share some of ours with you. Enjoy!
All data is for the week ended September 25, 2020.
Equity markets around the globe were generally lower last week with the S&P 500 down 0.61%, the Russell 2000 down 4.01% and the NASDAQ gaining 1.12%. Overseas, the international developed markets index (MSCI EAFE) dropped 4.21% while the emerging markets declined 4.42%. Within the U.S., technology and utilities were the best performing sectors while energy and materials were the laggards. (1) Volatility remains elevated with the index closing at 28.51. (2)
Interest rates fell and bond prices rose, with the benchmark 10-year treasuries down 4 basis points to 0.66%. The yield curve steepened slightly. (1) The yield premium on high yield bonds vs. government securities widened from 5.14 points to 5.64 points. (3)
The price of gold declined 4.8% to $1,871.30 per troy ounce primarily in response to a strengthening of the U.S. dollar against those currencies of the other major developed nations. (4) Gold becomes more expensive to foreign buyers - reducing demand – as the value of the U.S. dollar strengthens.
New home sales in August rose to 1.01 million units for the first time since 2006, a 43.2% year-over-year gain. This was well ahead of 875,000 units expected to sell. (5)
Durable goods new orders rose 0.4% in August, the fourth consecutive month of gains. Excluding defense, new orders rose 0.7%. The report was disappointing because growth slowed from the prior month’s report. (6)
Weekly new claims for unemployment benefits rose slightly last week versus expectations for a decline. The previous week’s numbers were raised slightly, both disappointing. Claims in California – where the effects of the pandemic have combined with issues related to wildfires – were again the highest in the country. (7)
Proprietary portfolio happenings:
PayPal Holdings (PYPL), a Core Select and G33 holding, and Square, a G33 holding, rose 6.3% and 8.8%, respectively. Investors appetite for these financial technology companies has grown due to the shift in digital commerce for retailers and other businesses to maintain and/or increase their revenues efficiently. (2)
Sysco Corp. (SYY), a Contrarian and G50 holding, declined as the COVID case count grew with associated fears of further restaurant restrictions. (8) Shares were down 8.3% for the week.
Did You Know? The TV series M*A*S*H, which depicted a Medical Army Surgical Hospital during the Korean War, premiered in September 1972. After its finale in 1983 (the most watched TV episode on record), the series had endured longer than the actual Korean War.
Sources: (1) JP Morgan Weekly Market Recap 9-28-20, (2) Yahoo Finance, (3) Federal Reserve Bank of St. Louis 9-24-20, (4) Apmex, (5) US Census Bureau 9-24-20, (6) US Census Bureau 9-25-20, (7) US Department of Labor 9-24-20, (8) Eater New York 9-25-20