The Threecap
Three things to recap this past week.
1. Volatile Week
Stocks had a rough and volatile week, with new information about the stimulus, the current economic recovery, and coronavirus numbers. Stocks opened this week up by rising on Monday but then fell for the next three days. They rose on Friday when data about retail sales showed an increase. The S&P 500 finished the whipsaw week higher 0.19%, the NASDAQ finished the week 0.79% higher, and the Dow Jones finished 0.07% higher and is now just 3% lower than its all-time high of 29,568.57.
Investors digested fresh new information about the economy this past week when retail sales for the month of September. Retail sales measure purchases at stores, restaurants, and online. It is widely considered to be an indicator of how strong consumers are. What will likely drive this market in the near future will continue to be how strong investors feel consumers are. In other words, they want to see consumers continue to spend more. Sales increased by 1.9% compared to the 0.7% that economists expected. This signals that consumers were spending in anticipation of more months staying at home.
2. The Double-Whammy Approaches
As flu season approaches, health experts are worried that a double whammy of the seasonal flu along with COVID-19 that will lead to more outbreaks and deaths — a third-wave. The number of cases reached a record-high when cases increased more than 69,000 on Friday. This pushed the total nationwide cases over 8 million cases. The country is averaging 55,000 new cases a day, representing a 16% increase in average daily new cases this week compared to last week. Previous editions of this newsletter that we’ve sent out covered what was happening in California, Texas, and Florida as they were reporting the largest number of cases. However, when we look at the number of cases per 100K people, North Dakota, South Dakota, and Montana are higher. It’s showing that COVID-19 is having an effect on the rural areas in addition to urban areas.
On the vaccine front, Johnson and Johnson paused its Phase 3 trials after a trial volunteer developed an illness. Pfizer, which was previously expected to release data regarding its vaccine in October, has said that their clinical trial results won’t be ready until mid-November.
3. Stimulus Updates
Lawmakers and officials in Washington are still negotiating to see if they can get another deal on stimulus agreed upon before the election. This puts increasing pressure on incumbents from both parties as they are trying to prove to their voters that they can get things done in DC before the election. Nancy Pelosi has called on the Trump administration to reach a coronavirus stimulus deal in 48 hours if they want to get the stimulus deal done before the election, which is a short two weeks from now.
Pelosi and Mnuchin are reportedly negotiating, with testing, addressing disproportionately affected communities as the main points of contention. This next week will reveal whether the chances of a stimulus deal before the election will increase or decrease. Especially recently, news of stimulus has swayed investors’ beliefs about the continued strength of the economy. We expect news of stimulus and the election to continue impacting the market till the November elections.
Recent Articles
Biotech During The COVID-19 Pandemic
Biotech companies are at the forefront of an unprecedented push to find a vaccine for COVID-19. Because a vaccine will allow people to safely return to work, biotech is the key to ending the pandemic. Biotech companies focus on altering living things, such as genetically engineering crops to have a higher yield or creating vaccines to immunize against diseases. The biotech industry is expected to reach a value of $727.1 billion by 2025, growing at an annual rate of 7.4%. The exponential growth in artificial intelligence is seen as a major catalyst in driving future growth in the biotechnology industry.
Intro To Accounting
Accounting is like the language of business in that it can communicate how a business is doing financially. Accounting is a process that tells us how much money is involved in certain business and financial activities. In accounting, there are two types of users: external users and internal users. External users, such as banks and the IRS, use accounting information to make decisions about a particular entity. This external accounting is called financial accounting. Internal users, such as accountants, treasurers, and managers, use accounting information to make decisions for the entity they work for. This internal accounting is called managerial accounting.
Recent Podcast
In this episode, Rohan Gupta and Cassandra Ying talk to Morgan Housel, one of the most insightful and unique writers and thinkers in all of finance, about the COVID-19 market so far. We delve into topics like the stimulus, day trading, behavioral finance, history, stock market trends, and much more!
Check out the episode to learn about the COVID-19 market so far in a simplified way!
Finance Tip
“Your assets are your employees. Invest more in those performing well. Let the non-performers go.” ― Manoj Arora