August 25, 2020

Bill Hastie |

Another powerful rally in the U.S. equity markets yesterday, with the Dow and S&P 500 surging 378.13 and 34.12 points, or +1.35% and +1.0%, respectively.  The red-hot NASDAQ also enjoyed an end-of-day rally finishing up 67.92 points, or +0.6%.

Two primary forces were at work yesterday.  First, global stocks gained as the U.S and China signaled progress on their phase-one trade deal.  The S&P 500 and stocks throughout most of Asia rose as the two countries reaffirmed their commitment to a deal despite disagreement over issues such as tech security in Hong Kong.

Second, recent advancements in the fight against COVID-19 ignited rallies in sectors of the Dow that had been previously hit hard due to the shutdowns.  Airlines, cruise ship companies and even retailers saw light at the end of the tunnel that perhaps sometime soon the social restrictions will be lifted, and the American consumer can get back to traveling, vacationing and shopping.

Although yesterday seemed to reflect a very “risk-on” investor sentiment, some investors continue to express concern over the sky-high markets (the S&P 500 high another all-time high again this morning), the continued coronavirus infections and the upcoming election.  This is backdrop for a very meaningful conversation with your investment advisor.