Klingman & Associates, LLC

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Weekly Market Snapshot

September 25, 2020

Market Commentary
by Scott J. Brown, Ph.D., Chief Economist

The death of Supreme Court Justice Ruth Bader Ginsburg ignited a fight over her replacement. The increased animosity in Washington lowered the odds that lawmakers will reach agreement on a further fiscal support package and dampened investor sentiment.

Durable goods orders rose 0.4% overall and excluding transportation in August. Aircraft order cancellations continued and a seasonal adjustment quirk had overstated motor vehicle orders in July. Otherwise, orders were mixed across industries and were generally slower. Both new and existing home sales reached their highest levels since 2006, with housing demand fueled by low mortgage rates and an expected longer-term shift to working from home.

Next week, the economic calendar is full. The first presidential debate is on Tuesday. The September Employment Report will be the last before the November 3 election. Nonfarm payrolls are expected to have risen more moderately, but figures will be subject to some seasonal adjustment distortions related to the start of the school year and the end of the summer travel season. The ISM Manufacturing Index should be consistent with further improvement in factory sector activity, although at a more moderate pace. Little change is expected in the third estimate of 2Q20 GDP growth (-31.7% in the second estimate), but August personal income and spending figures will help to fill in the GDP picture for the third quarter.


Indices

  Last Last Week YTD return %
DJIA 26815.44 27901.98 -6.04%
NASDAQ 10672.27 10910.28 18.94%
S&P 500 3246.59 3357.01 0.49%
MSCI EAFE 1830.90 1911.18 -10.12%
Russell 2000 1451.82 1542.60 -12.98%

Consumer Money Rates

  Last 1 year ago
Prime Rate 3.25 5.00
Fed Funds 0.08 1.85
30-year mortgage 3.02 3.75

Currencies

  Last 1 year ago
Dollars per British Pound 1.2747 1.235
Dollars per Euro 1.1672 1.094
Japanese Yen per Dollar 105.41 107.77
Canadian Dollars per Dollar 1.336 1.327
Mexican Peso per Dollar 22.153 19.566

Commodities

  Last 1 year ago
Crude Oil 40.31 56.49
Gold 1876.90 1512.30

Bond Rates

  Last 1 month ago
2-year treasury 0.13 0.14
10-year treasury 0.65 0.74
10-year municipal (TEY) 1.26 1.22

Treasury Yield Curve – 09/25/2020

Chart

As of close of business 09/24/2020


S&P Sector Performance (YTD) – 09/25/2020


Chart

As of close of business 09/24/2020


Economic Calendar

September 29  —  CB Consumer Confidence (September)
1st Presidential Debate (Cleveland)
September 30  —  CB Consumer Confidence (September)
 —  Real GDP (2Q20, 3rd estimate)
 —  Chicago Business Barometer (September)
 —  Pending Home Sales (August)
October 1  —  Jobless Claims (week ending September 26)
 —  Personal Income and Spending (August)
 —  ISM Manufacturing Index (September)
October 2  —  Employment Report (September)
 —  Factory Orders (August)
 —  UM Consumer Sentiment (September)
October 5  —  ISM Non-Manufacturing Index (September)
October 12  —  Columbus Day (bond market closed)
October 29  —  Real GDP (3Q20, advance estimate)
November 3  —  Election Day
November 5  —  FOMC Policy Decision

 

All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc. and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor's returns. U.S. government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.

Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business September 24, 2020.

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