Market Perspective for August 4, 2020

Equities started off the week on a bullish footing after manufacturing PMIs showed the U.S., Germany and Chinese economies all rebounding. The S&P 500 Index gained 0.90 percent and briefly traded above 3300 for the first time since February.

The ISM Manufacturing index climbed to 52.4 percent in July. Any number above 50 signals expansion. The services PMI will be out on Wednesday. Motor vehicle sales hit an annualized pace of 14.5 million in July, up from 13.1 million in June. Factory orders increased 6.2 percent in June, better than forecasted.

Economists expect jobless claims will hold steady at 1.40 million. They expect 1.75 million new jobs were created in July. They also forecast the unemployment rate to fall to 10.5 percent.

The Atlanta Federal Reserve’s GDP Now model projects 19.6 percent growth in the third quarter. This pace of growth would erase about half of the GDP decline from the second quarter.

Government bond yields continued falling to start the week. The 10-year treasury fell to 0.52 percent. Investment grade, corporate and government bond funds all rallied. High yield bonds were flat with credit risk holding steady.

The U.S. Dollar Index turned higher this week, with the index rising 0.2 percent.. iShares MSCI EAFE (EFA) shook off the stronger dollar to rise 2.46 percent on the first two days of trading. iShares MSCI Emerging Markets (EEM) climbed 1.93 percent.

Disney (DIS) beat earnings expectations after the close on Tuesday. It earned 8 cents per share. Analysts forecast a loss of 63 cents per share. Disney shares climbed in afterhours trading. Twilio (TWLO), Nikola (NKLA), Beyond Meat (BYND) and Activision Blizzard (ATVI) were all down in the aftermarket session following their earnings reports.

Wednesday brings ADT Corporation (ADT), Square (SQ), Roku (ROKU), Wayfair (W), Moderna (MRNA), Novavax (NVAX), Etsy (ETSY), Regeneron (REGN) and CVS Health (CVS).

Kodak (KODK), Trade Desk (TTD), Mercadolibre (MELI), Bristol-Myers (BMY), Illumina (ILMN) and (BKNG) headline Thursday earnings.

Kimco Realty (KIM), Ventas (VTR) and Sorrento Therapeutics (SRNE) close out the week.


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