US Stock Market Weekly Review Sept. 7- 11, 2020

A second consecutive week with losses for the US stock market with tech stocks and Nasdaq underperforming also for a second straight week. I believe that valuation concerns and profit-taking after the sharp recovery of the stock market from the lows in March 2020 are the key catalysts for this trend. As we approach even closer to the presidential election volatility for stocks may persist and even increase. At this point in time and these recent price levels, occasional pullbacks, and even sell-offs should not be of surprise.

Economic News

The week’s economic calendar sent some mixed signals about the path of economic recovery for the US economy. The weekly initial jobless claims came in at 884K, worse than the forecast of 846K but the same as per the previous week, while the continuing jobless claims after bottoming the previous week for one month, rose again to 13385K worse than the forecast of 12925K. The labor market continues to show signs of gradual and even weak signs of recovery and by no means rapid recovery, which would boost economic growth. The NFIB Small Business Optimism Index increased to 100.2 compared to the previous figure of 98.8 and the inflation surprised a bit on the upside with a figure of 1.3% on a year-over-year basis compared to the forecast of 1.2%. The core inflation rate also rose on a year-over-year data to 1.7% compared to the forecast of 1.6%. A small increase in inflation may be an early sign of increased demand for goods and services in this pandemic era, and any increased consumer spending is supportive of economic growth.

The United States Core Inflation Rate

“The US core consumer price inflation rate, which excludes volatile items such as food and energy, rose to 1.7 percent year-on-year in August of 2020 from 1.6 percent in June and above market expectations of 1.6 percent. It was the highest rate since March.” - Source: Trading Economics

 

 

For the week of September 7– September 11, 2020, the major US stock market indexes closed as follows on Friday, September 11, 2020:

• Dow Jones Industrial Average: 27665.64, -1.66% for the week, -3.06% Year-to-date

• S&P 500 Index: Close 3340.97, -2.51% for the week, +3.41% Year-to-date

• Nasdaq Composite: Close 10853.55, -4.06% for the week, +20.96%, Year-to-date

• Russell 2000: Close 1497.27, -2.48% for the week, -10.26% Year-to-date

Weekly Stocks Losers

These are the top 3 losers (percentage-wise), stocks with 5 days of consecutive price declines:

1. Evofem Biosciences Inc (NASDAQ:EVFM) , Close 2.10, 5-day change -41.34%

2. Fuwei Films [Holding (NASDAQ:FFHL), Close 3.51, 5-day change -38.53%

3. Biocept Inc (NASDAQ:BIOC), Close 3.61, 5-day change -38.14%

Economic events for the week September 14- 18, 2020:

Important economic data for the week will be the industrial production, retail sales, the NAHB housing market index (HMI), the Fed Interest rate decision and its economic projections, the jobless claims, the housing starts, and building permits and finally the Michigan consumer sentiment index preliminary.

Sources:

https://www.wsj.com/market-data/stocks/us/indexes

https://www.barchart.com

https://www.fxstreet.com/economic-calendar