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U.S. Markets Hoping for Coronavirus Relief Package; Gold Tumbles Tuesday

Market watch – August 14, 2020

August 14, 2020

The Dow opened strong this Monday, extending its winning streak to seven sessions, as investors weighed the likelihood of fresh federal stimulus spending and slowing rates of new coronavirus infections in the U.S.

Energy and material stocks led the way on Monday, while the Nasdaq dropped as key tech giants declined. By Monday’s close, the Dow was up 358 points, while the TSX rose 61, buoyed by rising oil prices and positive data out of China.

The Dow’s winning streak ended on Tuesday, however, as the prospects for a broad coronavirus relief package dimmed considerably in Washington. While all four major N.A. markets ended the day in the red, the biggest story of the day might have been gold prices, which fell by as much as 6%, its worst single-day decline since March.

N.A. equity markets were back on track Wednesday as the S&P 500 pushed toward its first record close since February, just missing the mark in late trading. The strong showing thus far in August has been accompanied by rising U.S. bond yields, an indicator that investors are becoming more optimistic about the pace of the economic recovery. Crude prices were up more than 2% Wednesday as data showed U.S. oil inventories had fallen.

While initial U.S. jobless claims fell to 963,00 for the prior week, the standoff between Republicans and Democrats over a coronavirus relief package was still unresolved on Thursday. Consequently, U.S. markets were mixed, with Dow and S&P 500 slightly off, while the Nasdaq registered a small gain. In Canada, weakening crude prices and the stalled U.S. relief package weighed on the TSX, which was off 45 points for the day.

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