The Week On Wall Street

The failure to reach an agreement on a new fiscal stimulus bill soured investor sentiment and sent stocks modestly lower for the week.

The Dow Jones Industrial Average fell 0.95%, while the Standard & Poor’s 500 lost 0.53%. The Nasdaq Composite index slipped 1.06% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, declined 0.44%. 1

Markets Disappointed With Stimulus Impasse

Stock prices ebbed and flowed all week, pulled by the gravity of fiscal stimulus talks in Washington, D.C. As investors saw improving prospects for a new fiscal stimulus bill, stocks rose. As prospects dimmed, stocks turned lower.

Hopes for striking a deal were raised late in the week as comments from a key negotiator suggested that a deal might be getting closer to fruition. The week ended, however, without an agreement, cementing a disappointing week of performance.

Market sentiment was further weighed down by the continued rise in COVID-19 cases in the U.S. and Europe, though anxieties were tempered by the belief that a full economic lockdown was unlikely.

New Jobless Claims Fall

Markets have been focused on weekly initial jobless claims as an important input into the state of economic recovery. After weeks of 800,000+ new jobless claims, last week’s report reflected an improving labor market, as new jobless claims rose by 787,000, below consensus estimates of 875,000, while continuing jobless claims fell by more than one million. 2

The report wasn’t entirely positive, however, as more than 500,000 individuals were added to the emergency assistance program that extends unemployment benefits to those who have run out of state unemployment benefits. 2

Weekly Tip

Your retirement may last 20 years or longer.
So, while you might want to invest more conservatively with age, you may not want to abandon equity investments that give you the potential to grow your savings at a rate faster than inflation.

The Week Ahead

Key Economic Data

  • Monday: New Home Sales.
  • Tuesday: Durable Goods Orders. Consumer Confidence.
  • Thursday: Gross Domestic Product (GDP). Jobless Claims.
  • Friday: Consumer Sentiment.

Companies Reporting Earnings

  • Monday: Twilio, Inc (TWLO).
  • Tuesday: Microsoft (MSFT), Pfizer (PFE), Caterpillar (CAT), Merck (MRK), Eli Lilly (LLY), 3M Company (MMM), Corning Inc. (GLW).
  • Wednesday: General Electric (GE), The Boeing Corporation (BA), Ford Motor Company (F), Visa (V), Mastercard (MA), Gilead Sciences (GILD), Blackstone Group (BX), Amgen (AMGN), United Parcel Services (UPS), EBay (EBAY), Norfolk Southern (NSC).
  • Thursday: Apple (AAPL), Facebook (FB), Twitter (TWTR), Alphabet, Inc. (GOOGL), Southern Company Airlines (SO), Shopify (SHOP), Comcast Corporation (CMCSA), AnheuserBusch InBev (BUD).
  • Friday: Abbvie (ABBV), Chevron (CVX), Charter Communications (CHTR).