Mixed Equity Markets

October 19, 2020

Market Update 2020-10-19.

Equity markets were mixed last week.  Covid cases are accelerating throughout the world and in parts of the USA. The S&P 500 rose 0.2%, led by industrials and telecom, while banks dragged the old-line financials down. The NASDAQ has bounced almost 6% in the past month and is within short striking distance of the record high set in early-September. Technology has led the S&P 500 again over the past month and is up more than 30% on the year.

Boosters

Consumer spending has been the key to the recovery, with incomes strongly supported by government transfer payments. Solid spending continued into September, with U.S. retail sales up a better-than-expected 1.9%. Excluding bars and restaurants, spending is up a monstrous 11.9% year on year, the strongest pace in 26 years! U.S. consumer discretionary is up more than 4% in the past month, almost keeping pace with technology, and is the top performing sector since COVID began, up 20%.

Lagging factors

What’s been lagging?  Energy and bank stocks.  Energy has posted the biggest decline over the past month and remains the weakest versus pre-COVID levels. After snapping back through early summer, the $40 range for oil has proven to be a tough hurdle given excess supply.

On the election front, just as most journalists have counted him out, the President’s odds of re-election are rising.

Resources

  • Our complete second half outlook has been also posted and can be found by clicking here.

 

Weekly market updates contain general information and expresses views of Oak Harvest Investment Services. Data, articles, and information cited are believed to be reliable at the time of creation, but are not guaranteed. Nothing in this content is intended as, nor should it be regarded as, personalized investment advice. Strategies and ideas discussed may not be right for you.  Views and opinions expressed may change without notice and do not constitute a recommendation, or an offer or solicitation to buy or sell securities. In addition, Oak Harvest makes no assurance as to the accuracy of any forecast made. Indexes like the S&P 500 are not available for direct investment and your results may differ. Past performance is not indicative of future results. Investing involves the risk of loss.