While the stock markets gained some momentum during the last week of August, they could not maintain that positive trend for the first week of September. Each of the indices listed here lost week-on-week, with the large-cap S&P 500 dropping almost 68 points, and the Global Dow falling more than 91 points. All of these indices are now in negative territory year-to-date, led by the Dow, which lost 9.65% from the 2014 market close.
The latest stock sell-off in China sent U.S. stocks reeling at the beginning of the week. However, good economic news spurred by a favorable GDP report shifted momentum as stocks rallied to close ahead of last week. For the week, the Dow and Nasdaq were the biggest gainers. However, of the major markets listed here, only the Nasdaq remains in positive territory year-to-date.
Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.
The Markets (as of market close August 21, 2015)
What a week! Investors had to take cover as several market indexes swooned to depths not seen in quite some time. Stocks responded negatively to China's continued economic woes, the not-entirely-unexpected resignation of Greece's prime minister (although he may be reelected in September), and crude oil hovering around $40. Compared to the August 14 close, the Dow lost nearly 1,000 points--closing down about 6%, Nasdaq dropped close to 7%, and each of the major market indexes listed here are now in negative territory year-to-date.
The Markets (as of market close August 7, 2015) It could be the result of an impending interest rate hike in September, or slumping oil prices, or lackluster earnings reports from some major companies, or it could be just summer doldrums, but the stock market definitely languished this past week as it has for most of the summer. The Dow continued its losing streak, falling over 300 points by week's end. The S&P 500 and Nasdaq followed the trend as well. But the week's biggest loser was the small-cap Russell 2000, which dropped 31 points, or over 2.5%. Possibly in response to the increasing likelihood that interest rates are going up in the near term, the price of gold (COMEX) fell a bit compared to last week, selling at about $1,093.00 by late Friday afternoon. Prices for crude oil (WTI) continued spiraling downward, selling at $43.75/barrel by week's end. The national average retail regular gasoline price decreased to $2.689 per gallon on August 3, 2015, $0.056 less than last week's price and $0.826 below a year ago.
The Markets (as of market close July 31, 2015) The stock markets rebounded last week amid a tepid report from the Federal Open Market Committee seemingly halting talk of an imminent interest rate hike--although every indication points to some rate movement before the end of the year. Nevertheless, each of the major U.S. indexes showed improvement over last week. Both the large-cap Dow (121 points) and S&P 500 (24 points) posted gains, as did Nasdaq, which jumped almost 40 points. Even the Global Dow showed improvement. On the other hand, the price of gold (COMEX) continued to hover around $1,095.00 as the demand remained weak. Crude oil (WTI) saw some upward movement early in the week, but ended up losing value--selling at $46.77/barrel as of late afternoon Friday. The national average retail regular gasoline price was $2.745 per gallon on July 27, 2015, $0.057 less than last week's price and $0.794 below a year ago.
Bulls and bears duked it out last week, with the Dow experiencing multiple triple-digit intraday swings. In the end, the bears prevailed as the Dow and S&P 500 had their third straight week of losses, which sent both back into negative territory for the year. The dollar continued to gain strength, hitting $1.06 against the euro (its highest level since January 2003), while the price of oil, which had been above $50 a barrel at the beginning of the month, fell to roughly $45. Coupled with the start of quantitative easing by the European Central Bank, that raised concerns about how U.S. multinational companies' sales overseas would fare going forward. The small caps of the Russell 2000, which are seen as having less international exposure, had the week's only gains.
Unexpected changes in monetary policy in China and support for additional stimulus in Europe helped propel the Dow industrials and S&P 500 to fresh record highs on Friday. Large caps, many of which earn a substantial portion of their revenues overseas, benefitted most, while the Nasdaq and Russell 2000 small caps ended with little changed.
Concerns about signs of weaker growth abroad seemed to outweigh domestic corporate earnings reports last week as volatility went extreme. The Dow industrials saw triple-digit swings four days in a row that wiped out all of the index's year-to-date gains, and both the Dow and the S&P 500 had their worst weeks since May 2012. By the end of the week, the S&P was down 5% from its most recent high (a 10% drop is considered a correction). Meanwhile, the Russell 2000 fell solidly into correction territory, ending the week down almost 13% from its most recent high in March. The Global Dow also turned negative year-to-date.
The volatility sent investors once again seeking the relative security of U.S. Treasuries. As the price of the benchmark 10-year note has risen, the decline in its yield has accelerated in each of the last four weeks; the 10-year yield ended last week at its lowest level since June 2013.
Volatility was the name of the game last week. In addition to a multination campaign of airstrikes against terrorist targets in the Middle East, a decline in U.S. durable goods orders and an upward revision to U.S. GDP sent equities yo-yoing. Friday's rally couldn't overcome earlier losses, particularly those suffered by the Nasdaq and Russell 2000. Meanwhile, increases in the price of the benchmark 10-year Treasury sent its yield lower.
A horrific week around the globe did little to discourage investors--that is, the few who were actually trading. The Nasdaq reached a level it hadn't seen since March 2000, the S&P 500 had its 28th record close of the year, and the Dow industrials' gains took the index above 17,000 once again. The Russell 2000, which has struggled much of the summer, came within a hair of returning to positive territory year-to-date. Meanwhile, the benchmark 10-year Treasury yield rose as demand fell.
Investor indecision about the future of equities prices, coupled with light summer trading volumes, led to volatility across the board last week. Friday's 186-point rally gave the Dow some relief after two down weeks, though not enough to nudge the index into positive territory for the year. The small caps of the Russell 2000 had their strongest week since early July, though they also remained down year-to-date. Meanwhile, geopolitical tensions increased demand for the relative security of the benchmark 10-year Treasury bond, sending its yield down. However, riskier high-yield bonds saw some selling pressure
In a week that saw mostly mixed economic data and generally positive earnings reports, markets posted mixed results as well. While tech and international stocks posted slight gains, the Dow Jones Industrial Average lost a little less than 1% after Friday's 123-point drop. Small caps continued their slump, and the S&P 500 finished the week flat despite hitting new records mid-week.
U.S. stocks dropped sharply Thursday in response to the downing of a Malaysia Airlines commercial jet over Ukraine and the Israeli ground invasion of Gaza. However, most indexes bounced back Friday to end another week in positive territory. The exception was the Russell 2000 Index, which continued its decline perhaps aided by Fed Chairman Janet Yellen's comments earlier in the week indicating that valuations in some small-cap sectors appear "substantially stretched." Treasury yields dropped last week, while gold ended the week about 2% lower.
After Alcoa's strong report unofficially kicked off the Q2 earnings season, domestic equities rebounded from two down days. However, investors decided to take advantage of equities' recent record levels and take some profits after revelations about a banking problem in Portugal revived concerns about Europe's financial sector. Meanwhile, the spot price of oil, which had spiked to $107 two weeks ago, ended the week just over $100 a barrel.
After generally positive economic data once again suggested that the economy really did begin to rebound this spring, the Dow industrials surpassed 17,000 for the first time, while the S&P 500 hit three new all-time records during the week. And as investors embraced stocks, worries about the potential impact of a strong economy on potential Fed rate increases also sent the benchmark 10-year Treasury yield up and the price down.
Reassurance from the Fed seemed to outweigh the situation in Iraq last week as investors showed greater comfort with taking on more risk. The week's biggest gains were in the small caps of the Russell 2000, which once again returned to positive territory for the year, while the Nasdaq closed the week at a level it hasn't seen since April 2000. Meanwhile, the Dow and S&P 500 set new record highs yet again--the 11th so far this year for the Dow, the 22nd for the S&P 500.
Equities took a break across the board from their recent upward surge. After fresh all-time record closes early in the week, both the S&P 500 and the Dow Industrials saw profit-taking that also returned the small caps of the Russell 2000 to negative territory for the year. Renewed conflict in Iraq contributed to equities' swoon, raising concerns about global oil supplies and pushing oil to roughly $107 a barrel.
For the third straight week, both large- and small-cap indices surged upward. Once again, the S&P 500 and the Dow industrials set new record highs, while the small caps of the Russell 2000 returned to positive territory for the year. The enthusiasm for equities took a toll on the benchmark 10-year Treasury note, whose yield rose as prices fell.
Equities took a downward revision to the U.S. GDP figure in stride; the Nasdaq continued to rebound while the S&P 500 and Dow industrials both hit new all-time closing highs. The recent rally in bonds continued as the benchmark 10-year Treasury yield hit its lowest level since last June. And after bouncing around for several weeks on either side of $1,300, the price of gold plummeted almost $50 an ounce last week, leaving it at roughly $1,245 an ounce and down almost 10% since spiking in mid-March.
After spending weeks bouncing around just under 1,900, the S&P 500 finally managed to top it on Friday, setting a new record closing high in the process. And after a lot of back and forth at the beginning of the week, the Nasdaq and the Russell 2000 small caps rebounded strongly from their travails of recent weeks, though the small caps are still down for the year.