The Week on Wall Street
A jump in COVID-19 cases dampened investor enthusiasm last week, sending stock prices lower on worries that rising infections could derail the economic recovery.
The Dow Jones Industrial Average slumped 3.31%, while the Standard & Poor’s 500 retreated 2.86%. The Nasdaq Composite Index lost 1.90% for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, declined 1.28%.[1],[2],[3]
A Rocky Week for Stocks
Investors began the week overlooking a jump in COVID-19 cases in some early reopening states, sending stocks higher and powering the NASDAQ Composite to close above 10,000 and establish a new record high on successive days. But the market quickly reversed course as investors reacted to data showing a troubling spike in nationwide COVID-19 cases.[4]
In Thursday’s trading, stocks opened lower but then rallied late in the day on no apparent news. Stocks resumed their decline on Friday, falling on news that Texas and Florida were rolling back some reopening plans amid rising COVID-19 infections.[5]
COVID-19 Cases
Investor expectations for an economic rebound took a hit last week, following reports of an increase in nationwide COVID-19 cases. The pace of infections had picked up in 33 states, with the seven-day average of new cases higher than the average over the last two weeks.[6]
While traders understood that reopening and increased testing would lead to an uptick in reported cases, the numbers were a bit unsettling. The week’s action reminded investors that the market remains tightly tethered to COVID-19 developments.
THIS WEEK: KEY ECONOMIC DATA
Wednesday: ADP (Automatic Data Processing) Employment Report. Purchasing Managers Index (PMI) Manufacturing Index. Institute for Supply Management (ISM) Manufacturing Index. Federal Open Market Committee (FOMC) Minutes.
Thursday: Employment Situation Report. Jobless Claims. Factory Orders.
Source: Econoday, June 26, 2020
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
THIS WEEK: COMPANIES REPORTING EARNINGS
Monday: Micron Technologies (MU).
Tuesday: FedEx Corp. (FDX), Conagra Brands (CAG).
Wednesday: Constellation Brands (STZ), General Mills (GIS).
Source: Zacks, June 26, 2020
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Working from Home and Expecting Some Tax Deductions? Not so Fast
With the COVID-19 pandemic changing the way nearly everyone works in 2020, many people have found themselves working from home. While it is true that some home office expenses can be tax deductible, there’s a specific distinction that taxpayers should be aware of.
As a result of the Tax Cuts and Jobs Act of 2017, for the tax years 2018-2025, you may not be able to deduct home office expenses if you are an employee. This is different than working from home and being self-employed or an independent contractor. These types of workers may still be able to write off some of their home office expenses.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from Forbes.com[7]
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Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia.
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[1] The Wall Street Journal, June 26, 2020
[2] The Wall Street Journal, June 26, 2020
[3] The Wall Street Journal, June 26, 2020
[4] Marketwatch.com, June 23, 2020
[5] FoxBusiness.com, June 26, 2020
[6] The Wall Street Journal, June 25, 2020
[7] Forbes.com, March 23, 2020
