October 8 Weekly Market Update

It’s been a bumpy few days for investors. On Friday, it was announced that President Trump tested positive for COVID-19. Stocks subsequently sold off due to presidential health concerns and the subsequent election uncertainty those concerns may create. President Trump was hospitalized and received a series of treatments over the weekend; he was permitted to return to the White House on Monday.

Furthermore, there was a continued lack of clarity on the fiscal stimulus front. On Tuesday, Federal Reserve Chairman Jerome Powell reiterated the need for a fresh round of fiscal stimulus in order to keep the fledgling economic recovery on track. Mere hours later, President Trump tweeted that he issued instructions to Congress to halt stimulus negotiations until after the election, quickly sending stocks south. The market then stabilized Wednesday after President Trump walked back some of his comments and urged Congress to pass a group of smaller bills designed to give checks directly to individuals and provide support to airlines and small businesses.

In other news, House of Representative Democrats proposed new antitrust legislation that could make it easier to break up large technology companies such as Facebook, Google, Amazon, and Apple. A notable part of the proposal bans major tech companies from acquiring potential rival companies for the purpose of eliminating competition. This is not the first time Congress has gone after large technology companies for what is believed to be anti-competitive behavior. But will Congress continue to pursue this legislation post-election – or is this just more Washington rhetoric?

While constant political bickering in an election year is nothing new, it does seem more acute than in years past. Some of that has to do with the continual bombardment of news via social media. If a new policy is proposed by a party or politician, there is now often an immediate – and sometimes disproportionate – reaction that affects the markets. However, the market’s attention may shift away from headlines next week as earning season begins. While earnings will look weak from a historic perspective, investors are hoping that companies, much like in the second quarter, will show a continuing improvement in revenue and earnings.

Stay safe and be well.

_{Market comments based on the S&P 500, Dow Jones Industrial Average and NASDAQ Composite indexes which are unmanaged and cannot be directly invested into.}

_{Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time and cannot be guaranteed.}

_{Past performance is no guarantee of future results. Investing involves risk and the potential to lose principal.}