Weekly Market Update
July 20, 2020
Week Ending: July 17, 2020

U.S. stock prices advanced last week as investors responded to a combination of better than expected corporate earnings and encouraging results for coronavirus vaccine candidates. Small and medium sized businesses returned to the forefront and significantly outperformed their larger counterparts for the week. Economic sector performance was mixed with declines in consumer discretionary and technology offset by gains in health care, industrials, materials, and utilities. Developed foreign stocks in Europe and Asia outperformed U.S stocks while Emerging Market stocks lagged both domestic and developed foreign markets.

U.S. Treasury yields narrowly declined this past week (bond prices and yields move in opposite directions). High yield corporate bonds were the best performing asset class, followed by investment grade corporate bonds. Investment grade corporate bonds are yielding approximately 2% and high yield corporate bonds are yielding more than 6%.

Economic data were mixed as manufacturing and retail sales were better than expected, while consumer sentiment retreated from the prior month. Additional stimulus measures remain outstanding but conversations have been intensifying in Europe to work through a proposed 750 billion EU recovery fund. Separately, France is expected to add another EUR 100 billion to support a recovery, bringing the cumulative total to more than 500 billion pledged by the government.