Weekly Market Update
July 6, 2020
Week Ending: July 3, 2020

U.S. stock prices advanced as the S&P 500 index recorded it’s highest quarterly gain (+20.5%) since 1998. Small and medium sized companies generally lagged large companies and growth outperformed, regardless of company size. All major economic sectors ended the week in positive territory, led by gains in real estate, materials, and consumer discretionary stocks. Developed foreign stocks in Europe and Asia lagged U.S stocks while Emerging Market stocks outperformed developed foreign markets.

U.S. Treasury yields were mixed for the week (bond prices and yields move in opposite directions) as short term bond yields narrowly declined while intermediate and long term yields nudged higher. Investment grade corporate bonds outperformed both government bonds and high yield corporate bonds, as investors balance credit quality and interest rate risks. Investment grade corporate bonds are yielding approximately 2.2% and high yield corporate bonds are yielding more than 6%.

The June employment report was better than expected, as the unemployment rate declined to 11%, after reaching a peak of nearly 15% in April. Other positive economic reports included rising consumer confidence, a surge in pending home sales, and improving survey data from the manufacturing sector. Global manufacturing data in Europe and China continued to show significant improvement, which are positive signs for a sustained economic recovery.