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    Capital Markets | 4 min read

    Market Commentary: Week of September 21, 2020

    What Happened:

    Risk markets last week could best be described as “moody.” Both the S&P and NASDAQ chopped around a fair amount, with both indices ending up in the red for the week. Big Tech stocks continued their slide from the August Olympian heights. However, we saw the IPO for Snowflake, a leading cloud software company, end up with a valuation of $70 billion by the end of first day trading. However, in corporate bond country, investment grade bonds held pretty firm and high yield bonds closed at their tightest level since the pandemic era began. The Fed FOMC met over the week and the mood of the committee was, as expected, grim. The big news was that most participants saw the Fed on hold well into 2023. Do you know what the world will look like in 2023, because we sure as heck do not! It appears that Europe is seeing a second wave of COVID-19, and cases and deaths roll on in the United States. This is casting a pall over the markets, especially with the White House and Congress all but giving up on a relief package for suffering Americans.

    • The S&P 500 declined .63% for the week. The average daily move for the week was .84%.

    • The NASDAQ declined .55% for the week. The average daily move for the week was 1.33%.

    • The two-year Treasury increased 1.1 bps on the week, closing at .14% Friday.

    • The 10-year Treasury increased 2 basis points for the week, closing at .69% Friday.

    • The VIX Index declined 4% for the week closing at 25.83 Friday.

    • The MOVE Index decreased 14%, closing at a new all-time low of 37.24 on Friday.

    • Five-year Investment Grade Corporates (as measured by Markit CDX) widened one basis point for the week, closing at 71 basis points on Friday (from March 1st; high 152 bps, low 65 bps). High-yield corporate debt (as measured by Markit CDX) tightened seven basis points, closing at 351 basis points. This is the lowest reading since March 1st (from March 1st; high 871, low 351).

    • U.S. Dollar Index decreased 0.4%, closing at 92.93 on Friday.

    • WTI Crude increased 9.7% the week using the November WTI Futures contract, closing at 41.32.

    • Gold, as measured by the December 2020 futures contract, increased 0.8% closing at 1,962 on Friday.

    What’s Going to Happen?

    Stocks are opening up the week poorly. Europe is selling off sharply as COVID-Wave Two has begun to make itself known in large population centers across Western Europe. Here in the U.S., with the passing of Supreme Court Justice Ruth Bader Ginsberg, a new mega-political battle has emerged. Just what we needed, right?

    The battle over the President submitting a replacement candidate and the Republican-controlled Senate confirming that nominee has put COVID-19 relief clearly in the back of the bus. While Congressman Jim Cooper stated over the weekend, “We should be smart enough to walk and chew gum at the same time,” we find the jury is still out on that assessment. Lots of housing data this week—which is good, considering it has consistently been the only bright spot since COVID-19 madness started. We also get Durable Goods figures for August.


    An index is unmanaged and not available for direct investment. Definitions sourced from Bloomberg.

    • The Bloomberg Barclays Global Aggregate Negative Yielding Debt Market Value Index represents the portion of the Bloomberg Barclays Global Aggregate Index that measures the aggregate value of global debt with a negative yield.

    • The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

    • The NASDAQ Composite Index is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market and Capital Market. The index was developed with a base level of 100 as of February 5, 1971.

    • The Cboe Volatility Index® (VIX) is a calculation designed to produce a measure of constant, 30-day expected volatility of the US stock market, derived from real-time, mid-quote prices of weekly S&P 500® Index (SPX) call and put options with a range of 23 to 37 days to expiration.

    • The ICE BofA MOVE Index is a yield curve weighted index of the normalized implied volatility on 1-month Treasury options. It is the weighted average of implied volatilities on the CT2 (Current 2 Year Government Note), CT5 (Current 5 Year Government Note), CT10 (Current 10 Year Government Note), and CT30 (Current 30 Year Government Note), with weights 0.2/0.2/0.4/0.2 respectively.

    • The Markit CDX North America Investment Grade Index is composed of 125 equally weighted credit default swaps on investment grade entities, distributed among 6 sub-indices: High Volatility, Consumer, Energy, Financial, Industrial, and Technology, Media & Tele-communications. Markit CDX indices roll every 6 months in March & September.

    • The Markit CDX North America High Yield Index is composed of 100 non-investment grade entities, distributed among 2 sub-indices: B, BB. All entities are domiciled in North America. Markit CDX indices roll every 6 months in March & September.

    • The U.S. Dollar Index (USDX) indicates the general international value of the USD. The USDX does this by averaging the exchange rates between the USD and major world currencies. Intercontinental Exchange (ICE) US computes this by using the rates supplied by some 500 banks.


    Investing involves certain risks, including possible loss of principal. You should understand and carefully consider a strategy’s objectives, risks, fees, expenses and other information before investing. The views expressed in this commentary are subject to change and are not intended to be a recommendation or investment advice. Such views do not take into account the individual financial circumstances or objectives of any investor that receives them. All indices are unmanaged and are not available for direct investment. Indices do not incur costs including the payment of transaction costs, fees and other expenses. This information should not be considered a solicitation or an offer to provide any service in any jurisdiction where it would be unlawful to do so under the laws of that jurisdiction. Past performance is no guarantee of future results.

    © 2020 SWBC. All rights reserved. Securities offered through SWBC Investment Services, LLC, a registered broker/dealer. Member FINRA & SIPC. Advisory services offered through SWBC Investment Company, a Registered Investment Advisor, registered as such with the US Securities & Exchange Commission. SWBC Investment Services, LLC is under separate ownership from any other named entity. SWBC Investment Services, LLC a division of SWBC, is a nationwide partnership of advisor.

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    John Tuohy

    John Tuohy is CEO of SWBC Investment Services, LLC, a Broker/Dealer and SWBC Investment Company, an SEC Registered Investment Advisor (RIA). In his role, John is responsible for identifying, developing, and executing the division's strategic plan and all business development, sales, and marketing activities.

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