Month: September 2020

The Russell 2000 Index gained 2.64 percent this week as investors continued rotating into small-cap stocks and value opportunities. The Dow Jones Industrial Average decreased 0.03 percent, the Nasdaq 0.56 percent and the S&P 500 Index 0.64 percent.

SPDR Energy (XLE) advanced 3.02 percent to lead the major sectors as crude oil rebounded above the $40 level this week. SPDR Industrials (XLI) climbed 1.49 percent, SPDR Materials (XLB) 1.00 percent and SPDR Healthcare (XLV) 0.89 percent. SPDR S&P Biotech (XBI) jumped 11.36 percent.

iShares Edge MSCI Minimum Volatility USA (USMV) gained 0.46 percent and Vanguard Dividend Appreciation (VIG) 0.22 percent. Although tech stocks broadly sold off, Tesla (TSLA) gained 18.41 percent on the week.

Homebuilders are at their most confident in history. The National Association of Homebuilders’ index hit an all-time high of 83 in September. Housing starts and building permits increased at annualized paces of 1.42 million and 1.47 million in August, respectively. iShares U.S. Home Construction (ITB) increased 0.64 percent on the week.

Retail sales increased 0.6 percent in August, and sales ex-autos climbed 0.7 percent. SPDR S&P Retail (XRT) returned 1.29 percent for the week.

The Federal Reserve met this week and held interest rate policy steady. Fed officials also put out their quarterly forecast. On average, they do not see rate hikes beginning until 2023. The 10-year Treasury yield closed the week at 0.69 percent.

Initial jobless claims fell to 860,000 this week, down 30,000 from a week ago. Initial claims have stayed elevated with several states still keeping their economies lockdowned. Continuing claims in state unemployment programs fell by nearly 900,000 though, indicating about 1.8 million workers returned to work last week.

The Dow Jones Transportation Index climbed 0.51 percent last week as value stocks continued to perform well. The Dow Jones Industrial Average slipped 1.66 percent, the Russell 2000 Index 2.48 percent, the S&P 500 Index 2.51 percent and the Nasdaq 4.06 percent.

SPDR Materials (XLB) rallied 2.93 percent last week, SPDR Industrial (XLI) 1.24 percent, SPDR Consumer Staples (XLP) 0.12 percent and SPDR Utilities (XLU) 0.04 percent. iShares Edge MSCI Minimum Volatility USA (USMV) added 0.13 percent and Vanguard Dividend Appreciation (VIG) 0.52 percent.

The National Federation of Independent Business stated its small-business confidence index climbed to 100.2 in August. Job openings hit 6.6 million in July, up 10 percent from June.

Initial claims for unemployment were 884,000 for the week ended September 5. Continuing claims held steady as well.

Producer prices increased 0.3 percent in August, beating the 0.2-percenet consensus forecast, but down from July’s blistering 0.6 percent. The consumer price index and core CPI were both 0.4 percent, higher than forecast, but also below July’s 0.6-percent increase.

The 10-year Treasury yield fell slightly to 0.67 percent last week. Invesco Senior Loan (BKLN) climbed 0.64 percent and iShares iBoxx High Yield Corporate Bond (HYG) 0.39 percent thanks to falling credit risk. iShares 20+ Year Treasury (TLT) fell 0.29 percent.

The U.S. Dollar Index stabilized falling less than 0.1 percent. iShares MSCI EAFE (EFA) rose 1.46 percent and iShares MSCI Emerging Markets (EEM) added 0.50 percent.

Crude oil lost two months of gains and fell to $37.33 by the Friday close. Reports of rising offshore storage coupled with the Russian central bank warning the price could fall to $25 spooked traders. SPDR Energy (XLE) dipped 2.79 percent.