August 19, 2020
The S&P 500 and NASDAQ set new all-time highs yesterday, completely erasing the historic plunge in February and March, leaving only the Dow yet to fully recover. On the day, the Dow dropped 66.84 points, or -0.24%, while the S&P 500 and NASDAQ added 7.79 and 81.12 points, or 0.23% and 0.73%, respectively. On the year, the S&P 500 is up 4.9%.
A series of economic reports in recent weeks have points to signs of a rebound in the U.S. labor market, the manufacturing sector, retail sales and consumer spending. Optimism that the U.S. economy may be on its way to a quicker recovery than expected has helped trigger a rally in stocks across a range of sectors, but not all sectors. While the S&P 500 (Total Return Index) has gained 4.9%, other sectors – S&P Financials, for example, is still down 20% for the year.
Amidst the optimism, some investors are concerned about the sustainability of the economic rebound. The market for weeks has been counting on additional stimulus spending by Washington, which has helped bolster consumer confidence. But talks between Republicans and Democrats remain stalled, although both sides say the bipartisan appetite for a deal remains high.
Our thoughts and prayers go out to the firefighters and families so severely affected by the many fires in California. It was reported earlier this morning that our local fire, the River Fire, has burned 10,074 acres and forced the evacuation of more than 5,000 people. From Hwy 68 last night, flames could be seen in several areas in the mountains to the south. Containment was estimated currently to be 8% - 10%, and full containment is expected by August 30.