Updated: 10-July-20
A weekly recap of market activity and events, featuring commentary, analysis written with individual investors in mind.
Week in perspective provided by Briefing.com. Briefing.com offers live market analysis on their web site www.Briefing.com
The Nasdaq Composite was where most of the action was this week, as it rose 4.0% and closed at a record high in four of the five trading sessions. The S&P 500 rose a respectable 1.8%, followed by a 1.0% gain in the Dow Jones Industrial Average. The small-cap Russell 2000, however, declined 0.6%.
The S&P 500 consumer discretionary (+4.8%), communication services (+4.7%), and information technology (+2.7%) sectors were largely responsible for the market's advance. Conversely, the energy (-4.6%), real estate (-1.8%), industrials (-1.4%), health care (-0.9%), and utilities (-0.2%) sectors finished lower.
This week's action started with a front-page editorial in one of China's state-run news outlets that suggested a "healthy bull market" was imminent for Chinese stocks. China's Shanghai Composite rose 7.3% this week. On Wall Street, the bull market in mega-cap technology stocks was hard to miss.
Tesla (TSLA) rose 27% in a pure momentum trade. Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), and Facebook (FB) rose between 3-6%. Amazon (AMZN) rose 10% -- brushing past reports that Walmart (WMT) is planning to launch a competing delivery service this month. WMT shares also gained 10%.
On Friday, many of the mega-cap technology stocks did take a breather, as investors rotated back into cyclical/value stocks following some positive remdesivir news. Gilead Sciences (GILD) said new data showed an improvement in severely-ill COVID-19 patients and a 62% reduction in the risk of mortality compared to the standard of care.
In M&A news, Warren Buffett made his first major deal during the pandemic, agreeing to acquire Dominion Energy's (D) natural gas assets for $4 billion in cash and assuming $5.7 billion in debt. Uber (UBER) agreed to acquire Postmates for $2.65 billion.
U.S. Treasuries finished the week mixed. The 2-yr yield increased one basis point to 0.16%, while the 10-yr yield decreased four basis points to 0.63%. The U.S. Dollar Index declined 0.7% to 96.63. WTI crude increased 0.4% to $40.57/bbl.