Stocks Rise, Stimulus Uncertain
Hello Eagle Wealth Community,
Last week we wrapped up our first social media campaign. You may remember, we entered all Eagle Wealth community members who "liked" our Facebook page into a drawing for a $100 charitable contribution made in their name. We thought it would be a fun promotion to grow our online community, but what we weren't expecting were the non-profit suggestions, inspiring conversations, and enthusiasm from many of you.
We drew three names, and they chose the following non-profits for children.
- Camp Okizu – Our first contest winners chose a charity very near and dear to their hearts. They selected Camp Okizu, a pediatric oncology camp, for their remarkable impact on members and families affected by childhood cancer. In a sad turn of events, the camp needs donations now more than ever. Last month it was significantly damaged by the Bear fire in northern California. This story tugged on our heartstrings and we couldn’t think of a better recipient. If you want to read more or are inclined to help you can find more information here.
- CASA of Central Oregon - Another client chose CASA (Court Appointed Special Advocates) because the volunteers give a voice to children in foster care.
- Healthy Beginnings - A beloved Central Oregon non-profit, Healthy Beginnings provides free comprehensive, health and developmental assessments for kids 0-5. The program helps kids overcome barriers and connects families to services that set them up for success.
We're so grateful for your participation and desire to support causes you care about. Follow us on Facebook for more market updates, news from our team, and educational materials.
Have a great week,
Your Eagle Wealth Team
Here we go sharing good news again. It's been a year of rainchecks, missed vacations, and cancelled celebrations. We're all feeling it - the void of what 2020 would have been. So, what if those changed plans turned it into something good?
Eagle Wealth love birds, Ian and Megan, tied the knot at the end of September in a small family ceremony in northern California. Sure, the wedding was a little different than they planned but the smiles on these two faces are undeniable. We know that love prevails and there’s always light at the end of the tunnel.
Cheers to silver linings and congrats to the happy couple!
The Week on Wall Street
Stocks staged a powerful rally last week, riding a wave of optimism over the prospect of the passage of a new fiscal stimulus bill.
The Dow Jones Industrial Average rose 3.27%, while the Standard & Poor’s 500 increased 3.84%. The Nasdaq Composite index gained 4.56% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, advanced 2.23%.[i],[ii],[iii]
The anticipation of lawmakers passing a new round of economic stimulus was a decisive driver of market action all week.
A mid-week tweet by President Trump announcing that he was ending stimulus negotiations sent stocks lower. Losses were exacerbated by sharp declines in some mega-cap technology companies as details emerged from a House Judiciary subcommittee report on its investigation into their competitive practices.[iv]
Stocks quickly reversed direction, climbing after the President tweeted that he would sign a limited stimulus bill, but lawmakers appeared to reject a piecemeal approach.
Stocks consolidated on Friday, helped by continuing stimulus talks and new election polls that suggested that the risk of a contested outcome appeared to be fading.
Small Cap Rally
The outperformance of large cap stocks relative to small cap stocks has been both wide and persistent during the last ten years. Last week’s action in small cap stocks, as represented by the Russell 2000 Index, indicates that smaller companies may finally be making up some ground.[v]
Last week, the Russell 2000 Index rose 6.33%, outperforming the S&P 500 by 2.4%.[vi]
While this outperformance may be fleeting, a potential broadening of the stock market rally may be considered a healthy development.
This week begins the third-quarter earnings season, with companies from a variety of industry sectors reporting (see below). Early earnings reports start predominantly with the major banks, whose earnings results may provide insight into the general health of American consumers.
As is often the case, company guidance about the future earnings may be of greater interest to investors than past results.
THIS WEEK: KEY ECONOMIC DATA
Tuesday: Consumer Price Index (CPI).
Thursday: Jobless Claims.
Friday: Industrial Production. Consumer Sentiment.
Source: Econoday, October 9, 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
Tuesday: Johnson & Johnson (JNJ), J.P. Morgan Chase (JPM), Citigroup (C), Blackrock (BLK)
Wednesday: Bank of America (BAC), UnitedHealth Group (UNH)
Thursday: Morgan Stanley (MS)
Friday: Schlumberger (SLB), J.B. Hunt Transport Services (JBHT), Kansas City Southern (KSU), V.F. Corporation (VFC)
Source: Zacks, October 9, 2020
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. 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.