Equities both domestically and abroad continued to edge higher in early trading this week. After falling nearly 34% in less than 30 days amidst the COVID-19 pandemic, the S&P 500 is now trading at new all-time highs. Impressive data on the housing front coupled with blow-out earnings from Target (TGT), Lowe’s (LOW), and Home Depot (HD) helped fuel this week’s rally. Retail giant Target recorded its fastest sales growth on record with same store sales jumping 24% in the second quarter. This impressive recovery in stocks continues to be driven by the Technology, Communication, and Consumer Discretionary sectors while the Energy and Financial sectors continue to lag. The level of housing starts surged by 22.6% in July, significantly higher than forecasts for a rebound of about 5%. On Wednesday, Apple (AAPL) became the first publicly traded company in the U.S. to reach a market cap of $2 trillion after first reaching the $1 trillion mark in August 2018. On Tuesday, U.S. House Speaker Nancy Pelosi said that Democrats may be willing to make cuts to their stimulus proposal to complete a deal with Republicans and speed up Covid-19 relief. Geopolitical tensions will likely remain in the headlines for the foreseeable future after President Trump called off the latest round of trade talks with China. Investors will look to the Fed minutes on Wednesday afternoon for hints form the central bank on inflation and monetary policy going forward.
Source: Morningstar, CNBC, Bloomberg, GSAM