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Our Weekly Commentary


Severin Commentary 7/6/2020

The holiday shortened week was a good one for investors, with a better-than-expected jobs report for June amid the continued reopening of the economy. The US unemployment rate fell to 11.1% after adding 4.8 million jobs to the economy. Economists were expecting 2.9 million jobs to be created, which signals that the economic recovery is accelerating more than many had initially expected.

4.8 million jobs added

With that being said, the global coronavirus case count surged past 10 million, with big increases in certain states. Some states like Florida, Texas, and Arizona have reverted their reopening plans until the average daily increase ticks down. Additionally, Apple closed more stores in certain states where the coronavirus is surging. This may cause some near-term headwinds for investors who are hoping for a smooth, V-shaped recovery

All major averages finished up for the week, with the Dow Jones Industrial Average up .90%, the S&P 500 index up 2.51%, and the Nasdaq Composite Index up 3.38%. The biggest under-performers were value sectors like financials, industrial, and utilities, up .61%, .98%%, and .92%, respectively. The biggest sector gainers for the week were communication services, materials, and real estate, which were up 3.29%, 3.56%, and 3.88%, respectively.

Real estate was the best performer due to better than expected homes sales. Pending home sales increased 44.3% in May compared to April, which beat the expectation of 15% and was the biggest increase on record, according to the National Associate of Realtors. Ultra-low interest rates have pushed home-buyers back into the market, although the uptick in coronavirus cases may upend the upward trend.




Sources

https://www.cnbc.com/2020/07/01/stock-market-futures-open-to-close-news.html

https://www.cnbc.com/2020/07/01/apple-to-re-close-30-more-retail-stores-as-coronavirus-cases-spike.html

https://www.cnbc.com/2020/06/29/coronavirus-update-pending-home-sales-spike-a-record-44point3percent-in-may.html

https://www.cnbc.com/2020/07/01/stock-market-futures-open-to-close-news.html

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This material is for general information only and is not intended to provide specific advice or recommendations for any individual. To determine what is appropriate for you, consult a qualified professional.

Investment advice offered through Severin Investments, a Registered Investment Advisor.

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