Monday, August 17, 2020 - DIA 278.95 -.03%, QQQ 275.32 +1.16%, SPY 337.91 +.31%
The National Association of Home Builders (NAHB) index came in at an exceedingly strong 78 versus the previous 72. A reading over 50 indicates that more builders view sales conditions as good compared with those who view them as poor. Record low mortgage rates and a population shift away from big cities, such as NYC, may explain a good percentage of this. (The price of lumber has reflected and confirmed this demand, as prices have more than doubled since March.) The market was dominated once again by the large-cap tech companies that benefit from the work at home trend. AMZN is a particular beneficiary of the remote worker's trend. The dollar continued to hit new lows against the major currencies. Gold (GLD) and Silver (SLV), which have been in a pullback, rallied off their 50-day moving averages. The best S&P 500 sector was Consumer Discretionary (XLY) up 1.29%, the worst being Financials (XLF) -1.67%.
Tuesday, August 18, 2020 - DIA 278.20 -.03%, QQQ 277.97 +.96%, SPY 338.64 +.21%
The seasonally adjusted annual rate of Housing Starts came in well above expectations at 1.496 million versus an expectation of 1.252 million. Building permits also surprised to the upside with a reading of 1.495 million versus 1.330 million expectation. As has been the trend, large-cap tech continues to outperform. Nasdaq 100 (QQQ) once again hit a new high. Walmart (WMT) which had been a pandemic standout sold off in light profit-taking. Stocks on balance traded in a quiet session as DNC convention became a focus of attention.
Wednesday, August 19, 2020 - DIA 277.43 -.03%, QQQ 276.10 -.67%, SPY 337.23 -.43%
No major economic releases on the day. The Federal Open Market Committee (FOMC) minutes for the July meeting were released in the afternoon. The perception of Fed watchers and traders was cautionary, and so, stocks experienced mild and orderly profit-taking. As a consistent standout of the Nasdaq run to new highs, Apple Inc. (AAPL) became the first stock to reach a whopping $2 Trillion market cap to much fanfare. Target 154.22 (TGT) +12.6% posted a record quarterly profit as it benefited from changing spending patterns due to COVID-19.
Thursday, August 20, 2020 - DIA 277.87 +.015%, QQQ 279.93 + 1.38%, SPY 338.28 +.31%
Initial Jobless claims reported 1.11 million, worse than the expectation of 910K. Initial jobless claims (state & fed) came in at 1.43 million higher than the prior reading by 100K. Continuing claims for the regular state program came in at 14.8 million much better than the prior reading of 15.5 million. Continuing claims (State & Fed.) came in slightly better at 28.1 million versus the prior reading of 28.3 million. Leading Economic Indicators (LEI) came in positive at a weak 1.4% versus the prior reading of +3.0%. Nasdaq 100 (QQQ) continued its record-making highs. Microsoft (MSFT), Facebook (FB) both rose more than 2% Tesla shares (TSLA) hit the $2K mark. As the DNC convention continued and the platform became more readily apparent to investors, green energy shares attracted interest, and conversely, we saw weakness in carbon-based derived energy shares, also evidenced by the weakness in S&P 500 Energy ETF (XLE) 36.26 -2.16% which came under pressure.
Friday, August 21, 2020 - 279.29 +.51%, QQQ 281.87 +.69%, SPY 339.48 +.35%
Existing Home Sales came in at an annualized rate of 5.86 million- way above the expected 5.5 million. For a context, the prior reading was 4.7 million annualized. In general, the market traded in a quiet summer Friday fashion. One area we are seeing a continuation of investor interest is in the housing market due to the blistering data points, Homebuilder continued higher led by Pulte (PHM) which hit a post-panic high, along with Lennar (LEN).
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