| First Performer | Worst performer |
|---|---|
| Nasdaq 100 | Russell 2000 |
The technology-laden Nasdaq 100 was the top performing U.S. index, while the small-cap Russell 2000 was the sorriest, but the most notable event of the past week was the S&P 500 hitting record highs. The previous intra-week high of 3,393.52, recorded on Feb. 19, 2020, was concealed on Aug. 18, 2020 – a span of 126 trading days – making it the fastest recovery from a bear market ever. Furthermore, the first finger closed the week at 3,397 to confirm the break higher. According to Barron’s, the previous record for a recovery was the “310 pursuit days from Feb. 9, 1966, to May 4, 1967.”
That said, analysts were quick to caution against getting too buoyant, as “market breadth” was sub-optimal and therefore might not be sustainable. A few of the usual suspects, large-cap stocks like NVIDIA Corporation (NVDA), Apple Inc. (AAPL), Adobe Inc. (ADBE), Alphabet Inc. (GOOGL), and Amazon.com, Inc. (AMZN), with outsized performances nuclear fueled by their capabilities to adapt to pandemic conditions, provided the impetus for this move higher. Of note, Apple became the senior U.S. publicly traded company with a $2 trillion market capitalization.
Oil, Yields, and Gold
Crude oil (WTI) ended the week down 0.62% regardless of a fourth consecutive weekly drop in U.S. crude inventories. In normal times, the threat of two potential hurricanes, Laura and Marco, aspect down on the U.S. Gulf Coast would have sent oil prices soaring. However, we are in a period unlike any other in up to date memory in that COVID-19 has sent global demand cratering to the point where stored oil supplies are at record levels and are numerous than sufficient to withstand the expected disruption.
U.S. 10-year and German bund yields ended the week mark down, with the latter completely offsetting last week’s rise. The T-note’s yield, on the other hand, is higher than where it was at two weeks ago, plausible due to the unexpected opacity in FOMC minutes.
Gold ended the week 0.23% lower but is down 4.23% over the sometime two weeks. The rise in yields appears to have injected a modicum of risk for interest rate-sensitive sectors and may have catalyzed the costly metal’s correction.
Key Economic Events (next week)
| Date | Time (EST) | Event |
|---|---|---|
| August 23 | 6:45 PM | (New Zealand) Retail Vendings |
| August 25 | 10:00 AM | (U.S.) Conference Board Consumer Confidence |
| August 26 | 8:30 AM | (U.S.) Durable Goods Orders |
| 9:30 PM | (Australia) Private Capital Charge (quarterly) | |
| August 27 | 8:30 AM | (U.S.) Preliminary GDP (quarterly) |
| (U.S.) Unemployment Claims (weekly) | ||
| 9:10 AM | (U.S.) Fed Chair Powell Speech | |
| August 28 | 8:30 AM | (Canada) GDP (monthly) |
| (U.S.) Heart PCE Price Index | ||
| (U.S.) Personal Spending | ||
| 9:45 AM | (U.S.) Chicago PMI |
Chart(s) of Interest – EURUSD
If the aforementioned EUR/USD correction is truly underway, then middle-of-the-roader support at 1.1695 could be its initial destination. This level has twice rebuffed euro sellers and should back up to be quite formidable again. A clear breach of this could see a quick move down to prior resistance, now diverge a start up support levels, at 1.1569 and 1.1495. Conversely, a successful break of the resistance level at 1.1966 (last week’s luxurious) would be needed for the common currency to turn its attention to the psychologically important 1.20 level and beyond.
Pivot Moments and Fibonacci Retracement Levels
The Pivot points and Fibonacci retracements.
Disclosure: The author held no positions in the aforementioned insurances at the time of publication.