Jan. 10, 2020 - The first full week of 2020 ended with modest gains for the major equity indices, which is pretty good considering the seemingly dire geopolitical situation we found ourselves in to begin the week.
Tensions with Iran seem to be cooling. New sanction announced today are unlikely to mean too much, especially for U.S. investors, as Iran has been under strict sanctions for several years.
A tragic sidebar to the situation in Iran involving Dow Jones Industrial Average component Boeing (BA) sent the stock sharply lower Wednesday after a 737-800 crashed shortly after takeoff in Iran. Boeing had just rallied Tuesday on speculation about a possible activist investors campaign and some headlines that made it seem like the company could be moving toward getting the troubled 737-Max back in the air.
The stock rallied back Thursday after intelligence agencies from several countries suggested the plane crashed after being hit by a missile, as opposed to suffering a mechanical problem. Those gains were, in turn, erased Friday when emails from company employees were published that showed discussions of misleading regulators and describing the 737-Max as being "designed by clowns".
Boeing's struggles, and a sharp drop from Walgreens Boots Alliance (WBA) after a disappointing earnings report lead the Dow to underperform the other major indices for the week.
Also on Friday, the monthly Employment Situation Report showed slightly less hiring in December than had been expected, but the average from November's strong report and December still puts us roughly in like with the last several years of hiring activity.
Finally, White House economic adviser Larry Kudlow spoke on television Friday, saying that a phase two deal with China will depend on how well China complies with the phase one deal set to be signed next week. Kudlow added that Trump is "in no rush" to make another deal and said it could be negotiated after the election.
Markets closed lower Friday. The slide began not long after Kudlow's comments, but not really close enough to say that were the cause with any certainty. It is also possible that traders are just unwilling to leave money in markets through the weekend given the number of potential geopolitical issues that could arise at seemingly any moment.
Indices
On the week, the S&P 500 gained 0.94%, the NASDAQ added 1.75%, and the Dow Jones Industrial Average rose 0.66%.S&P 500
Six Months
Two Years
