Weekly International Markets Summary – 25 July 2020 - July 25, 2020
A big week of swings in the US equity markets pass by as earnings season gets to its main crux.The S&P 500 and Dow lost 0.3% and 0.8% for the week, respectively. The Nasdaq notched a 1.3% weekly loss. It was the leading sector for the year that underperformed in the week. Most of the large cap technology names made sharp declines for the week. The top 5 blue chip technology names, Apple, Microsoft, Amazon, Alphabet and Facebook- constituting about 25% of the S&P 500 all got sold down. Gold prices surged to a new closing record for the first time since 2011 as investors sought relatively safer assets. Most actively traded gold futures, for delivery next month, advanced 0.4% to $1,897.50 a troy ounce. Meanwhile, the yield on the 10-year Treasury note fell to 0.589% Friday from 0.628% last week, falling for the third consecutive week.
Intel Inc., reported strong earnings for the second quarter beating analysts consensus estimates but shares of Intel fell $9.81, or 16.2% Friday, to $50.59 after its earnings, the biggest single-day decline since March.The company announced that their development of their superfast chips will be delayed by atleast 12 months. The company’s main competitor Advanced Micro Devices’ (AMD) shares gained by over 16% as the company is likely to benefit from Intel’s troubles.
Although the economic conditions are weak, the global fiscal and monetary stimulus continues to provide ample liquidity to markets. Most global investors have attributed the gains in the equity markets to this stimulus and has gone as far as even writing of economic and earnings growth for 2020 and 2021. The markets are happy to pay up for potential earnings growth that is likely to materialize only in 2021.
Silver prices also gained to 52-week highs as precious metals has seen strong demand against inflation as the Central Bank printing press keeps busy. Over the weekend, the US government is likely to agree to new plan that will send stimulus checks-probably amounting $1200- to US households.
