Recovery Optimism Builds
The last few days, we watched with you as outraged and frustrated protesters spilled out into the streets of American cities. Our firm is committed to empowering people to change not just their financial lives for the better, but their entire lives. At Eagle Wealth, you hear us talk a lot about values. We must live up to them to inclusively build stronger connections and stand with our whole community. We'll continue to focus on unity and grow as individuals - and hopefully as a country.
We hope you and your family are faring well during these extraordinary times. Please let us know how we can support you or someone you care about.
Your Eagle Wealth Team
Ian and Megan have their hands full taking care of their new puppy, Rye, a 4-month-old standard party poodle.
Her fearlessness nearly got the best of her when she had her first wildlife run in. While visiting Montana, she dashed over to a herd of deer without hesitation. One deer began to walk towards her as she barked and puffed her chest out, forgetting her size as so many small dogs do. The more Rye woofed, the closer the deer came. Still, she persisted to growl until they were barely a yard apart. After telling that deer who’s the boss, she retreated safely back to her parents, giving Ian and Megan quite a laugh.
So, what’s little Rye teaching us (besides that she’s good at making us smile)? Now is the time to be brave and persistent, even during tough times.
The Week on Wall Street
A positive jobs report sent stocks soaring last Friday, capping a solid week as evidence of a global economic recovery outweighed concerns over civil unrest and tensions with China.
The Dow Jones Industrial Average jumped 6.81%, while the Standard & Poor’s 500 advanced 4.91%. The tech-heavy Nasdaq Composite Index lagged, climbing 3.42%. The MSCI EAFE Index, which tracks developed stock markets overseas, gained 5.52%.[i],[ii],[iii]
Stocks March Higher
Despite multiple headwinds, stocks rode a wave of optimism over economic recovery and were encouraged by signs that a feared spike in COVID-19 had not occurred.
Firming oil prices and positive global manufacturing data helped boost stocks during the week. The market continued to be led by industry sectors that were most battered in the March decline, as price advances slowed in growth-oriented stocks, primarily technology names.
After a pause on Thursday, stocks surged on Friday when a jobs report surprisingly showed 2.5 million new jobs in May, with the unemployment rate falling to 13.3%. Wall Street expected a jobs decline of over 8 million and an unemployment rate of 19.5%.[iv],[v]
A Wall of Worry
While the markets continued to move higher last week, many investors are concerned that the recovery may be hindered by simmering tensions with China and the civil unrest that erupted last week.
China has been a longstanding source of market worry, but the civil unrest introduces a new challenge. For now, the market appears to have shrugged off these concerns.
This past Wednesday marked the best 50-day gain for the S&P 500 in the index’s history. During a period that approximates the lifespan of a mosquito, stock market sentiment has swung from near-absolute despair in late March to positively bullish.[vi]
Often, the most impactful lessons in life tend to be those most recently learned. If the last three months have offered investors any lesson, it may be that trying to time the market is a challenging proposition.
THIS WEEK: KEY ECONOMIC DATA
Wednesday: Consumer Price Index (CPI). Federal Open Market Committee (FOMC) Meeting Announcement. Federal Reserve Chair Press Conference.
Thursday: Jobless Claims.
Source: Econoday, June 5, 2020
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
THIS WEEK: COMPANIES REPORTING EARNINGS
Monday: Coupa Software (COUP).
Tuesday: Chewy (CHWY).
Thursday: Lululemon (LULU).
Source: Zacks, June 5, 2020
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.