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| September 21, 2020

The Week on Wall Street
Stocks slipped as the technology sector remained under pressure and a mid-week announcement by the Federal Reserve failed to inspire investors.
The Dow Jones Industrial Average declined 0.03%, while the Standard & Poor’s 500 fell 0.64%. The Nasdaq Composite index dropped 0.56% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 0.75%.
Technology Pulls Stocks Lower 
As has been the case in recent weeks, technology stocks led the market higher, then lower in an otherwise turbulent week of trading.
Merger and acquisition activity announced at the start of the week generated a rush back into technology stocks, sparking a rebound from the previous week’s drop. Stocks continued to advance until Wednesday, when investors began to digest comments from the Fed’s Federal Open Market Committee meeting. The Fed delivered a message that coupled assurances of continued low rates with concerns about the health of the economic recovery. 
The Fed Stays the Course
In the last Federal Open Market Committee (FOMC) meeting before the November election, the Fed signaled that interest rates would not be increased “until labor market conditions have reached levels consistent with the committee's assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.” 
Most Fed officials do not see this happening until 2023.
While the Fed maintained its view on the importance of fiscal stimulus to help American workers and businesses, it did improve its outlook for unemployment in its latest economic outlook. The Fed now expects unemployment would average around 7-8% in the final three months of the year, down from its June prediction of around 9-10%. 
Tuesday: Existing Home Sales.
Thursday: Jobless Claims. New Home Sales. 
Friday: Durable Goods Orders.
Tuesday: Nike (NKE), Autozone (AZO), Fedex (FDX)
Wednesday: General Mills (GIS)
Thursday: Costco Wholesale (COST), Darden Restaurants (DRI), Carnival Corp. (CCL)
Final Thoughts
With election anxieties climbing, it is not surprising the markets are taking a breather and giving back some gains. The better question is, will this be the start of the next bear market? Or are markets simply experiencing asset rotation?
Perhaps it’s a healthy move for markets. However, it’s a fairly extreme move. What the last several months have shown is that these markets can move in aggressive fashion. The declines in March happened in just a few weeks. So when it goes, it goes quickly.
A four-week correction would be pretty quick. In fact, the S&P500 is already looking over-sold going into this week. So, while an outside possibility, there is still potential that some will ‘buy the dip’ at this point. Many of the large tech companies — the same companies that were viewed as the safe havens in the last pull-back — are trading at prices not seen since July.
This week stands to be important in the analysis picture. Given the nature of Washington, it may simply be that markets move sideways for the next several weeks. If markets find a foothold here, it sets up a sideways and somewhat range-bound scenario between now and the election.

Have a good week!