August 24, 2020
A nice rally on Friday ended a solid week of performance on Wall Street last week. On the day, the Dow was the big winner gaining 190.63 points, or +0.69%. The S&P 500 and the NASDAQ followed suit, gaining 11.65 and 46.80 points, or +0.34% and +0.42%, respectively. The technology sector had the largest percentage gain for the week, up 3.6%, followed by a gain of 1.8% in consumer discretionary and 1.6% in communications services. The energy sector had a very rough week, dropping 5.7%, followed by a 3.4% decline in financials. Other sectors that declined last week were utilities, industrials and materials.
The U.S. equity markets are in rally mode again this morning with all three major indices posting solid early gains. The drivers of today’s market are gains in technology and recent developments in the treatment of the coronavirus. When asked if the technology sector is headed toward another “tech bubble” like in 2000, an analyst said on CNBC this morning, “No, big tech stocks have strong earnings while some had little or no earnings back in 2000.”
Today’s gains also come as the number of new coronavirus infections continues to decline in the U.S. Since spiking by more than 64,000 new cases, Johns Hopkins University reported that there were less than 37,000 confirmed cases yesterday. “I think it is entirely possible that USA COVID-19 cases crash to sub-10,000 in September,” said Tom Lee, head of research at Fundstrat Global Advisors.