Company / Analytics

Week 28 in Brief

How did the major indexes perform?

U.S. stocks ended higher Friday, supported with positive news of coronavirus treatment as investors gauge economic outlook from the impact of the rising COVID-19 cases. Big Tech Stocks dominated the week, setting a new all-time high record for the tech-heavy NASDAQ.

• On Friday, the Dow Jones Industrial Average added 369.21 points, or 1.4%, to close high at 26,075.30. The S&P 500 gained 32.99 points, or 1.1%, to close at 3,185.04 while the tech-heavy Nasdaq Composite closed at 10,617.44, up 69.69 points, or 0.7%, its 27th record of 2020. Both indexes had seen a massive fall on Thursday.
• For the week, the Dow finished 1% higher, the S&P 500 booked a gain of 1.8%, and the Nasdaq advanced 4%.
• The market was driven by positive news from Gilead Sciences which said its previously disclosed clinical trial data found its experimental therapy remdesivir can reduce the risk of mortality in COVID-19 patients. Gilead stocks went up 2.2% and finished trading on Friday at $76,32, even though analysts are asking for more proof.
• Big Tech Stocks continued to dominate the week. Amazon recorded its 10th-straight weekly gain, up nearly 11%. Amazon stock topped the $3,000 mark for the first time on Monday and rose through the week, and closed trading at $ 3,200. Analysts at Citi raised their one-year-out expectation for the stock to a Wall Street high of $3,550 from $2,700 amid what they see as ongoing, pandemic-driven, upside dominance in online sales.
• Tesla shares rocketed 10.8%, closing at a record of about $1,545 as investors looked forward to earnings results later in the month. It was the first time Tesla stock topped the $1,500 threshold. Tesla shares have exploded lately, soaring 39% this month alone and bringing its 2020 gains to a whopping 259%. Tesla founder Elon Musk is now richer than Warren Buffet.
• Meanwhile, Netflix soared 8% on Friday, closing up at $548.73 and saw its best week since January 2019, according to Dow Jones Market Data.
• The outperformance of tech stocks over the past few weeks could set the sector up for a bumpy earnings season, said Andrew Slimmon, a senior portfolio manager at Morgan Stanley Investment Management.
• COVID-19: The U.S. saw a record number of new infections of COVID-19, rising by more than 63,000 to mark another single-day record, as hospitals in Texas, California, and other states also saw rising hospitalizations from the illness. Total U.S. Covid-19 cases have climbed to more than 3.1 million and the death toll topped 133,000, according to data compiled by Johns Hopkins University. Cases are also resurging in other parts of the world.

European stocks closed higher on Friday, but with mixed results for the week. Energy firms slid 1.4% as oil prices fell on worries of fuel demand. Shares in Germany led the region.

• The pan-European Stoxx 600 finished 0.9% higher, while the U.K.’s FTSE 100 rose 0.8%.
• Shares in Germany lead the region, with the DAX climbing by 1.15% while France’s CAC 40 is up 1.01% and London’s FTSE 100 is up 0.76%.
• Meanwhile, German genetic testing firm Qiagen rose 3.1% after it reported a 68% rise in quarterly earnings amid strong demand for products used in coronavirus testing. Qiagen closed trading at $45,31 on Friday. US hedge fund Davidson Kempner is Qiagen to seek a higher price than the €39 per share it agreed in a takeover offer from Thermo Fisher in early March, saying the deal underestimates how much the company will benefit from the coronavirus pandemic. The New York-based firm said it expects Qiagen’s earnings to rise 67% by the end of the year. In its second-quarter results, the company said it “continues to experience unprecedented demand” for coronavirus-related products, Financial Times reported.

Asian stocks fell on Friday, with a pause in Chinese stock rallies, reflecting fears any global economic recovery may stall out amid climbing cases Covid-19 cases. Tokyo and China reported increased infections.

• The China CSI 300 index halted an eight-session winning streak, with a loss of 1.8%. The index has climbed 14% this month, driven in part by articles in government-backed newspapers cheering on the market. That has raised questions over whether China’s latest rally will collapse on itself like it did in 2015.
• MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.76%. Australian stocks dropped 0.42%, while Japanese stocks declined by 0.4%.
• The Shanghai Composite fell 1.2% and the Nikkei 225 in Tokyo shed 0.7% to 22,368.44. The Hang Seng in Hong Kong retreated 1.9% to 25,702.64. The Kospi 180721, in Seoul lost 1.2% to 2,141.63 and Sydney’s S&P-ASX 200 declined 0.6% at 5,917.60. India’s Sensex fell 0.3%.
• Separately, China said that it would impose reciprocal sanctions against U.S. officials after the U.S. imposed sanctions on individuals and institutions for human rights abuses of Uighurs, a mostly Muslim ethnic minority living in China’s Xinjiang province.

Commodities

• U.S. crude fell 0.23% to $39.53 a barrel, while Brent crude edged 0.02% lower to $42.34 per barrel due to concerns about a long-term decline in global energy demand.
• Some energy investors are seeing encouragement from oil’s ability to rebound from the price lows hit back in April, even if the commodity appears to be stuck in a range of around $40 a barrel for the moment.
• Meanwhile, Gold futures ended lower on Friday but held ground above $1,800 an ounce to score a fifth weekly gain in a row as the spread of coronavirus in many U.S. states and other countries raised the need to hedge against risk amid continued uncertainty over the economic outlook. For the week, gold rose roughly 0.7% from last week’s settlement.

Currencies

• The U.S. currency posted its largest weekly percentage loss against a basket of major currencies in a month. In late afternoon trading, the dollar index fell 0.2% to US$ 96.624.
• Reflecting the market’s increased risk appetite, the euro rose 0.2% against the dollar to $1.1300, while the British pound was up 0.1% at $1.2631.
• The dollar also fell to a two-week low against the safe-haven yen. It was last down 0.3% at 106.92 yen. Meanwhile, the Chinese yuan in the offshore market was down about 0.2% at 7.0114 per U.S. dollar, having touched a near-four-month high of 6.9808 on Thursday.