July 27, 2020

Weekly Market Commentary July 20th to July 24th 2020

U.S. jobless claims rose last week to 1.42 million. This is the first week-over-week increase since March and the 18th consecutive week in which new claims have surpassed 1 million. The rise comes at a time when COVID-19 cases are also increasing and shows that the jobs recovery is being challenged. Continuing jobless claims were reported marginally better than expected at 1.62 million.

Existing Home Sales spiked by over 20% on a month-over-month basis to an annual pace of 4.72 million homes. Although the reading is still -11% below this time last year, the National Association of Realtors described the current environment as “red hot” in their latest report. New Home Sales were equally strong, advancing 14% from the prior month to 776k and back in line with where they were during the pre-pandemic boom. Extremely attractive mortgage rates are a tailwind for buyers.

The S&P 500 Index moved briefly into positive territory on a year-to-date basis before pulling back. For the week, the index was lower by -0.3%. The NASDAQ index finished the week lower by -1.3%, weighed down by large cap tech stocks, but remains well ahead by over 15% this calendar year. Yields continued to fall during the week with the bellwether 10-Year U.S Treasury lower by 7 basis points to 0.59%.

Key economic releases next week include the highly anticipated first look at Q2 GDP, closely followed Weekly Jobless Claims and Durable Goods Orders. The Federal Reserve will hold their next 2-day policy meeting.