Weekly Investment Update

A busy earnings season continued last week, with now more than a quarter of S&P 500 companies having reported results.  Year-over-year earnings growth, on average, continues to be starkly negative, but most companies have surprised analysts’ consensus expectations on earnings and revenue.  In fact, 81% of S&P 500 companies reported a positive earnings surprise and 71% of reported a positive revenue surprise.  As of last Friday, the blended average of results for companies that have reported and analysts’ consensus expectations for those that have not yet reported stands at -42% year-over-year.  Given the high degree of uncertainty regarding economic activity and the COVID-19 virus, most companies have elected not to provide earnings guidance for the rest of the year, which could increase the level of price volatility around future earnings seasons.

This week, investors will be watching for signs of progress on the next economic stimulus package from Washington as well as the Federal Reserve’s Open Markets Committee (FOMC) meeting on Wednesday.  The US is still facing very high levels of unemployment and rising cases of the COVID-19 virus, so lawmakers and the White House are attempting to move swiftly to finalize a deal, particularly given that the $600 per week in federal unemployment assistance formally expired last week.  No significant changes are expected from the FOMC, but investors will be listening for the group to continue their very accommodate position toward monetary policy.

 

Source: All return and economic data provided by FactSet, as of 7/27/2020

 

Key Economic Releases This Week

Source: FactSet

Asset Class Returns

Source: Bloomberg, Morningstar, FactSet (total returns shown gross of fees)
As of July 24, 2020

Prices & Interest Rates

Source: Bloomberg, Morningstar, FactSet (total returns shown gross of fees)
As of July 24, 2020

Past performance may not be representative of future results.  All investments are subject to loss.  Forecasts regarding the market or economy are subject to a wide range of possible outcomes.  The views presented in this market update may prove to be inaccurate for a variety of factors.  These views are as of the date listed above and are subject to change based on changes in fundamental economic or market-related data.  Please contact your Financial Advisor in order to complete an updated risk assessment to ensure that your investment allocation is appropriate.