Market Update: Mon, Aug 31, 2020 | LPL Financial Research

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DAILY INSIGHTS

Stocks opened slightly lower. The S&P 500 Index will try for another record high and its eighth-straight up day as an unusually strong month of August comes to a close. Market participants remain focused on current market influencers:

  • central bank support
  • fiscal stimulus negotiations
  • vaccine optimism
  • better-than-expected economic data
  • resilient corporate earnings
  • US-China relations
  • US elections

Asian equities were mostly lower overnight with South Korea and Taiwan under pressure, although Japan gained more than 1% after Warren Buffett made several investments in the country. China was down only 0.2%. European markets are little changed overall in midday trading.

The perfect week. The S&P 500 not only gained every day last week, it also closed at a new all-time high every single day. The last time it did that during a five-day week was October 2017, and it was March 1998 before that. The index has made a new high six consecutive days and hasn’t hit seven in a row since 1997, showing just how rare this type of bullish action is.

August to remember. With a day to go, the S&P 500 is up more than 7% for the best August since 1984. Incredibly, 16 days have closed higher this August, for the most for any month since April 2019, and the most for any August since 2003. But this now opens the door to September, historically the worst performing month of the year. We take a closer look at this later today on the LPL Research blog.

Week ahead. This week’s economic calendar features the August jobs report on Friday (Bloomberg consensus is 1.4 million net new jobs). Other key data this week includes the Institute for Supply Management (ISM) Manufacturing Index on Tuesday, and the Federal Reserve Beige Book on Wednesday. Thursday will bring another anticipated weekly unemployment initial claims report and the US Bureau of Labor’s Q2 productivity and unit labor cost report.

Technical update. The S&P 500 gained 0.3% on Friday, closing above 3500 for the first time ever. The first target for the index can be found at 3677, about 5% above last week’s closing level, while the February highs at 3393 can now be viewed as the first level of support on pullbacks.

COVID-19 news. The improvement in new cases leveled off over the weekend, with the seven-day average of new cases down only 3% through Sunday. Hospitalizations continued to drop, falling 12.8% week over week, though the trajectory has flattened some (source: COVID Tracking Project). Cases are rising in Iowa, Minnesota, Indiana, Michigan, and the Dakotas. Among major countries outside the United States, India is seeing the biggest surge in cases.

LPL Research in the Media

LPL Research Chief Market Strategist Ryan Detrick was quoted in TheStreet and Newsweek.com recently.

LPL Research on Fox Business. LPL Financial Chief Market Strategist Ryan Detrick joined Charles Payne on Fox Business Friday, August 28, to discuss the amazing August run, what could happen in September, and top sector ideas. You can watch the full interview here.

 

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