2 Tropical Storms, COVID: O2 Wealth Economic Update, August 21, 2020

U.S. and World News

  • weather-1180882223Two tropical depressions are being watched closely as computer models show a high probability of one making landfall in Texas and one making landfall in Florida on Monday. University of Miami meteorologist Brian McNoldy stated that “We could actually have Laura and Marco sharing the Gulf of Mexico on Monday, and both making U.S. landfalls on Monday”. The National Hurricane center is forecasting that both tropical systems will develop into mild hurricanes. If computer models and forecasts are correct, it would mark the first time in history that two hurricanes move through the Gulf of Mexico.
  • The latest U.S. COVID-19 data updates suggest that the second wave of the virus, particularly in the Sun Belt region, is subsiding. California and Florida saw a sharp decline in hospitalizations yesterday with Florida’s positivity rate coming in at under 10% for the second day in a row. Robert Redfield, head of the CDC, stated that infections in the southern-states are slowing and that the deaths should start to fall over the next week. Meanwhile, Notre Dame and the Univeristy of Pittsburgh are among several schools that have announced that effective immediately, all in-person classes will be suspended after coronavirus outbreaks at the campuses.

Markets

  • Markets continued to rally this week. The S&P 500 rose 0.77% and closed at 3,397. The Dow Jones rose 0.09% and closed at 27,930. Year-to-date, the S&P 500 is up 6.46% and the Dow Jones is down -0.59%.
  • Interests rates moved lower this week. The 5 year and 10 year U.S. Treasury Notes are yielding 0.27% and 0.63%, respectively.
  • The spot price of WTI Crude oil fell this week. Prices fell -0.14% and closed at $42.25 per barrel. Year to date, Oil prices are down -30.81%.
  • The spot price of Gold dropped -0.31% and closed at $1,939.09 per ounce. Year to date, Gold prices are up 27.81%.

Economic Data

  • Initial jobless claims increased by 135,000 to 1.1 million and the four-week moving average of claims increased by 51,000 to 942,000 million. Claims rose by18,000 in New York, 16,000 in California, and by 15,000 in Texas. Claims fell by 5,000 in Michigan.
  • The level of housing starts rose by 22.6% to a seasonally-adjusted-annualized-rate of 1.496 million versus expectations for an increase of 5.0%
  • Building permits rose by 18.8% versus expectations for an increase of 5.4%
  • Existing home sales rose by 24.7% to a seasonally-adjusted-annualized-rate of 5.86 million units versus expectations for an increase of 14.6%

Fact of the Week

  • Thursday marked 100 days since the March 23rd lows we saw in the market. The last 100 days have been the best performing 100 day period in market history, with the S&P 500 returning 50.8% over the period. The previous best was the 100 day period ending 7/30/2009, when the market returned 45.9% (Source: Strategas Research Partners)

Rich Gartelmann CFP® – (630) 844-5730 rgartelmann@oldsecond.com
Steve Meves CFA® – (630) 801-2217 smeves@oldsecond.com
Brad Johnson CFA®, CFP® – (630) 906-5545 bjohnson@oldsecond.com
Jacqueline Runnberg CFP® – (630) 966-2462 jrunnberg@oldsecond.com
Ed Gorenz – (630) 906-5467 ejgorenz@oldsecond.com
Mike Demski – (630) 966-2430 mdemski@oldsecond.com
Mike Cava CFA®, CFP® – (630) 281-4522 mcava@oldsecond.com

Visit Old Second Wealth Management

Non-deposit investment products are not insured by the FDIC nor any govt agency; not a deposit of, or guaranteed by, the bank; may lose value.

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