Uncertainties Outweigh Upbeat Data to Pressure Stocks…..

U.S. equities finished mixed, as a better-than-expected jobless claims report that showed a figure south of the 1 million mark for the first time since the pandemic began was tempered by disappointing guidance from Dow member Cisco Systems and Vroom, the continued stalemate on Capitol Hill on a next wave of fiscal support, and lingering U.S.-China tensions. In other equity news, Dow component 3M Company issued relatively upbeat July sales results. Treasury yields were higher as bond prices declined, adding to this week’s rise and following another sign of hotter-than-expected July inflation. The U.S. dollar resumed its grind downward and gold continued to recover from an early-week tumble, while crude oil prices dipped. Europe finished lower and markets in Asia were mixed.

The Dow Jones Industrial Average fell 80 points (0.3%) to 27,897, the S&P 500 Index decreased 7 points (0.2%) to 3,373, while the Nasdaq Composite rose 30 points (0.3%) to 11,043. In moderate volume, 719 million shares were traded on the NYSE and 3.4 billion shares changed hands on the NASDAQ. WTI crude lost $0.43 to $42.24 per barrel and wholesale gasoline shed $0.01 to $1.23 per gallon. Elsewhere, the Bloomberg gold spot price advanced $35.97 to $1,951.80 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.2% at 93.29.

Jobless claims moderate more than expected to a level below 1 million, import prices rise

Weekly initial jobless claims came in at a level of 963,000 for the week ended August 8th, better than the Bloomberg estimate of 1,100,000, and compared to the prior week’s upwardly-revised 1,191,000 level. This was the first reading below the 1 million mark since the pandemic began in March. The four-week moving average declined by 86,250 to 1,252,750, while continuing claims for the week ended August 1st fell by 604,000 to 15,486,000, south of estimates of 15,800,000. The four-week moving average of continuing claims dropped by 454,500 to 16,169,500.

The Import Price Index rose 0.7% month-over-month (m/m) for July, compared to expectations calling for a 0.6% increase and versus June’s unadjusted 1.4% gain. Compared to last year, prices were down 3.3%, versus forecasts of a 3.1% fall and smaller than June’s negatively-revised 3.9% drop.

Treasuries added to this week’s drop that was amplified by hotter-than-expected inflation data, as the yield on the 2-year note ticked 1 basis point (bp) higher to 0.16%, the yield on the 10-year note gained 4 bps to 0.72%, and the 30-year bond rate was up 6 basis point at 1.42%.

©2020 Charles Schwab & Co., Inc. All rights reserved. Member SIPC.

Schwab Center for Financial Research (“SCFR”) is a division of Charles Schwab & Co., Inc. The information contained herein is obtained from third-party sources and believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. The investment information mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinions are subject to change without notice in reaction to shifting market conditions.