EAFE (international index) lost about -1.50%. Despite the rather negative sentiment, it’s important to note as of Monday, the S&P 500 had officially doubled since its COVID-19 pandemic low on March 23, 2020. The rally took just 354 trading days to achieve and marks the fastest pace of any comeback since the inception of the index. Going forward, rebounding coronavirus infections are a worry, with five states seeing their seven-day averages for new COVID-19 cases rise to record levels through yesterday. Cases in the U.S. were reported at over 252,000 Tuesday, with the seven-day average above 141,000, the highest level since early February. At the global level, COVID-19 cases have now increased for eight straight weeks. Investor confidence is getting hit by concern that the economic impact of the pandemic will linger, compounding the risks posed by any tapering of Federal Reserve stimulus, regulatory clampdowns by China and travel curbs.
Federal Reserve officials are hoping to wind down stimulus without another “taper tantrum” like in 2013. Investors will look to the minutes from the Federal Open Market Committee’s July meeting (set for release on Wednesday afternoon) for any indicators as to when the Fed will start to taper its bond buying program. China’s markets tumbled this week after the country issued a set of rules governing competition among online platform operators. The MSCI China index has fallen nearly 30% after notching new all-time highs earlier this year. On the data front, the Commerce Department said on Tuesday that U.S. retail sales dropped 1.1% in July as consumer spending dipped broadly in everything from clothing to cars. Housing data was mixed this week, as housing starts decreased by 7% in July, while new building permits increased above expectations to 2.6%.
Source: GSAM, CNBC, JPM, Factor Investor
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