Stocks Finish Higher, Posting a Second Consecutive Week of Gains….

U.S. stocks closed higher, helping the markets reach back-to-back weekly gains after a tumultuous September. The on-again, off-again fiscal stimulus negotiations were again in focus, as fresh headlines suggested that the White House is prepared to make a larger relief offer, spurring some optimism. However, uncertainty surrounding the timing and likelihood of any potential deal is still giving investors pause. Further progress on the COVID-19 treatment/vaccine front continued to provide markets with a boost, as Gilead Sciences announced constructive data on its investigational antiviral treatment known as Remdesivir. Semiconductors also aided the positive backdrop, with the Wall Street Journal reporting that Advanced Micro Devices is in advanced talks to acquire rival Xilinx for potentially more than $30 billion, while NXP Semiconductor boosted its Q3 guidance. Treasury yields dipped as bond prices moved higher, and the U.S. dollar continued to give back its late-September run. Gold rallied and crude oil prices fell. Asia finished mixed, but China rallied on data and a return from the extended Golden Week holiday break, and Europe closed mostly higher amid a plethora of data.

The Dow Jones Industrial Average increased 161 points (0.6%) to 28,587, the S&P 500 Index rose 30 points (0.9%) to 3,477, and the Nasdaq Composite gained 159 points (1.4%) to 11,580. In moderate volume, 851 million shares were traded on the NYSE and 3.4 billion shares changed hands on the Nasdaq. WTI crude oil was $0.59 lower at $40.60 per barrel and wholesale gasoline lost $0.03 to $1.20 per gallon. Elsewhere, the Bloomberg gold spot price added $34.94 to $1,928.76 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.5% lower at 93.06. Markets were higher for the week, as the DJIA gained 3.3%, the S&P 500 increased 3.8%, and the Nasdaq Composite rose 4.6%.

Treasury yields dipped as stocks post solid weekly gains, wholesale inventories miss…..

August wholesale inventories were unexpectedly revised lower to a 0.4% month-over-month (m/m) rise, versus expectations to be unrevised at the preliminary estimate of a 0.5% gain, and compared to July’s negatively-revised 0.2% dip. Sales rose 1.4% after July’s upwardly-revised 4.8% gain.

Treasuries were higher, with the yield on the 2-year note little changed at 0.15%, the yield on the 10-year note ticked 1 basis point (bp) lower to 0.77%, and the 30-year bond lost 2 bps to 1.57%. The Treasury yield curve has steepened a bit amid heightened volatility induced by increased political and fiscal relief uncertainties. Moreover, economic data has mostly painted a recovery picture and the Fed continues to pledge to do whatever it can to bolster the economic recovery, which continues to be threatened by the severely elevated level of unemployment.

©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.