Friends
With the Fed standing firmly by their side, the bulls continue to push stocks higher. Yes, the economy has recovered somewhat, but news from the airlines and companies like Coca-Cola continue to shine a light on what is likely to be a longer term concern. Companies will combat their loss of revenues with job layoffs and cutbacks. We are now an economy that is in a major transition, one that was thrust upon us by the pandemic. Trends that were already developing have been accelerated at breakneck pace. Unfortunately, while stocks rise, so many will be left behind. The Fed has good intentions, and their policies are attempting to help Main Street, but unfortunately what is happening is that the wealth gap widens as a byproduct. Again, it’s an unintended consequence and difficult to assign blame. I’m asked almost daily why stocks are going up with all the bad things unfolding on the news every night. There’s a lot of liquidity provided by the Fed, and with interest rates at zero, that money continues to find its way into stocks.
As for today, by the close, the Dow Jones Industrial Average was up 161 points to finish the day at 28,653. The S&P 500 was up 23 points to close at 3,508. The Nasdaq Composite Index was up 70 points to close at 11,695. Gold was up $40 to trade at $1,972 per ounce, while oil was down $.07 to trade at $42.97 per barrel WTI.
It looks like August will finish up as another good one for stocks. No, not all stocks are doing well. Energy, financials, industrials and materials (economically sensitive areas) are all mostly still down significantly for the year. But, as I mentioned, we are an economy in transition. Stay tuned, the rest of 2020 should be very interesting.
Have a great weekend everyone.
