October 2020 Economic Update
It’s time for your educational economic update for October 2020. This month’s video, we’ll discuss some recent headlines that influenced the financial markets in September and provide some perspective on what these developments may mean in the months ahead.
Stocks dropped in September as investors worried about stalled fiscal stimulus talks in Washington, the upcoming election, and new coronavirus cases in Europe.
The S&P 500 Index lost nearly 4 percent, while the Nasdaq Composite declined just over 5 percent. The Dow Industrials dipped 2.3 percent.[i]
After a strong rally in August, investor sentiment turned negative quickly as a drop in tech stocks dragged down the overall market.
The month had a few bright spots. A slight pick up in buyout deals and progress on a COVID-19 vaccine gave the bulls some cheerful news.
The market cut its deep losses as September came to a close, surging on the final two days of trading as legislators appeared to reopen fiscal stimulus talks.
In a challenging year, one strong sector has been housing, which has seen an uptick in consumer demand, partly thanks to lower interest rates.
Housing accounts for 15 percent of the nation’s gross domestic product, so investors will be watching to see if the sector can retain its momentum in the fourth quarter and into 2021.[iv]
That’s it for this month’s economic update signing off for the month of October 2020.
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[i] The Wall Street Journal, September 30, 2020. The Dow Jones Industrial Average is an unmanaged index generally considered representative of large-capitalization companies on the U.S. stock market. The S&P 500 Composite Index is an unmanaged index that is considered representative of the overall U.S. stock market. The Nasdaq Composite Index is an unmanaged index that is considered representative of small-capitalization companies. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index. The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.
[ii] CNBC.com, September 22, 2020
[iii] EyeOnHousing.com, September 16, 2020
[iv] Federation of American Scientists, October 2, 2019
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