Company / Analytics

Week 32 in Brief

How did the major indexes perform?

U.S. stock indexes closed mostly higher this week, despite Washington’s failure to produce a last-minute coronavirus aid package before Congress takes a summer recess, leaving America’s economic recovery hangs in the balance. Rising tensions between Beijing and Washington were also in focus after the Trump administration ordered a ban on transactions with a pair of China-based technology companies.

• For the week, the Dow Jones Industrial Average gained 0.3% to close at 27,433.48, its biggest percentage gain since June 5; the S&P 500 gained 2.5% to close at 3,351.28, its biggest weekly percentage climb since July 2; and the Nasdaq Composite climbed 2.5% to close at 11,010.98.
• The Russell 2000 Index of small-capitalization stocks outperformed, adding 24.56 points, or 1.6%, ending at 1,569.18.
• Investors remained hopeful that America’s economy eventually will receive another boost from government spending, but also worried that July’s job gains, reported by the Labor Department on Friday, might cause Congress to drag its feet.
• The U.S. added 1.76 million jobs in July — just one-third of the unexpected 4.8 million gain last month — with the unemployment rate falling to 10.2% from 11.1% in June, which slightly higher than economists’ consensus of 1.7 million jobs.
• US-China Tensions: Trump signed an executive order late Thursday barring transaction with the parent companies of Chinese social media companies TikTok and Tencent as the president attempts to force the acquisition of TikTok’s U.S. arm in the coming 45 days. In response, TikTok, which is owned by China-based ByteDance, has threatened to sue the president, reflecting rising Sino-American tensions.
• Boeing Co. shares fell 1.3% after a report that a 737 craft operated by Air India crash-landed in Southern India before breaking in two. Shares regained but closed trading at $170,02.
• Uber Technologies posted another quarterly loss of more than $1 billion Thursday as the COVID-19 crisis took a toll on its core ride-hailing business, which was surpassed by Uber’s food-delivery business. Shares fell 5.2% and closed at $32,90.
• Shares of Pfizer Inc. gained 0.5% on Friday after it announced that it will help manufacture Gilead Sciences COVID-19 treatment remdesivir as part of a multiyear agreement with Gilead Sciences. Pfizer shares closed trading at $38,45.
• T-Mobile US shares gained 6.5% after, briefly hitting a record high of $116 a share, after the company’s newly merged wireless company with Sprint reported 1.1 million new monthly subscribers in the second quarter, much better than Wall Street’s estimates.

European markets finished higher on Friday with shares in Germany leading the region. Markets were boosted by telecoms, technology, and healthcare stocks.

• The pan-European STOXX 600 index closed up 0.3%, booking a 2% gain for the week. The FTSE 100 rose 0.1%, ending the week 2.3% higher, Germany’s while France’s CAC 40 were flat, but all logged weekly rises.
• The broader telecoms index rose 1% to lead sectoral gains, although stocks considered more sensitive to business cycles such as banks, miners and energy sectors gained most this week.
• Deutsche Telekom, which owns 43% of T-Mobile rose 2.7% after the U.S. firm added more monthly subscribers than expected in the second quarter and said it surpassed rival AT&T. Deutsche Telkom closed trading at 14,84 EUR.
• Hikma Pharmaceuticals jumped 10.9% after saying it had started manufacturing remdesivir, an approved treatment for COVID-19 from U.S.-based Gilead, and it raised its annual sales outlook for two of its biggest divisions. Hikma closed trading at 2 393,00 GBX in London.

Asian markets finished broadly lower on Friday with shares in Hong Kong leading the region.

• The Hang Seng is down 1.60% while China’s Shanghai Composite is off 0.96% and Japan’s Nikkei 225 is lower by 0.39%.
• U.S.-listed shares of Chinese firms fell on Friday following Trump’s ban on U.S. transactions with the China-based owners of WeChat and TikTok.

Commodities

• Oil prices fell nearly 2% on Friday, limiting their weekly gain due to concerns the global recovery could falter from a resurgence of coronavirus cases.
• Brent crude fell 69 cents, or 1.5%, to settle at $44.40 a barrel. U.S. West Texas Intermediate (WTI) crude fell 73 cents, or 1.7%, to end at $41.22 a barrel.
• Meanwhile, Gold futures for December lost $41.40, or 2%, settling at $2,028 an ounce.
• The 10-year Treasury note yield rose 2.7 basis points to 0.562%, ending the week with a 2.6 basis point gain. Bond prices move inversely to yields.

Currencies

• USD bounced on Friday after U.S. job growth for July helped ease some investor worries on the U.S. labor market, but the currency logged a seventh straight week of declines.
• The ICE U.S. Dollar index, which measures the greenback against a basket of currencies, rose in the wake of the report and hit its highest in three days. It was last up 0.7% at $93.410.
• EUR has retreated from recent highs and was last down 0.8% at $1.1785 while GBP fell 0.7% to $1.3057.
• USD is at its most oversold level in over 40 years, investment bank Morgan Stanley said on Friday, adding it had now shifted from its dollar-bearish stance and turned “tactically neutral” on the U.S. currency.
• Emerging market currencies are expected to rise a bit further in the coming months as a sliding U.S. dollar offsets domestic worries about large economic imbalances stemming from the coronavirus pandemic, a Reuters poll showed.