The Week on Wall Street
Stocks advanced relentlessly last week on positive COVID-19 developments, encouraging economic data, and a supportive policy shift in the Fed’s approach to its target inflation rate.
The Dow Jones Industrial Average increased by 2.59%, while the Standard & Poor’s 500 jumped 3.26%. The Nasdaq Composite index leaped 3.39% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 1.19%.[i],[ii],[iii]
Stocks Power Higher
Investors pushed stock prices higher all week as hopeful news came with each new day, from the announcement of a potential treatment for COVID-19 to news that U.S. and China negotiators had met by video conference. Despite another high new jobless claims number, other economic data released during the week indicated a continuing economic recovery, further supporting investor enthusiasm for stocks.[iv]
The Fed’s announcement of a shift in its inflation policy, which suggested that rates are likely to remain low for a long time, helped push the market higher. The momentum carried over into Friday, leaving the S&P 500 and NASDAQ Composite at new record highs and the Dow Jones in positive year-to-date territory.[v]
Changes in the Dow Industrials
It was announced last week that the Dow Jones Industrial Average will be undergoing some changes. The Dow Jones Industrial Average is a price-weighted index.
THIS WEEK: KEY ECONOMIC DATA
Tuesday: ISM (Institute of Supply Management) Manufacturing Index.
Wednesday: ADP (Automated Data Processing) Employment Report. Factory Orders.
Thursday: Jobless Claims. ISM (Institute of Supply Management) Services Index.
Friday: Employment Situation Report.
Source: Econoday, August 28, 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.
[i] The Wall Street Journal, August 28, 2020
[ii] The Wall Street Journal, August 28, 2020
[iii] The Wall Street Journal, August 28, 2020
[iv] CNBC.com, August 27, 2020
[v] CNBC.com, August 27, 2020