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    Capital Markets | 4 min read

    Market Commentary: Week of September 28, 2020

    Last Week

    Another very volatile week in equity, corporate bond, and currency markets. It was a virtual smorgasbord of issues. We are now seeing a resurgence of COVID-19 in Europe, as well as the beginning of a new Midwestern American hotspot. We also got the news that President Trump is treating handing the reigns of the Presidency over to his opponent—should he lose— as an option he would consider, as opposed to just doing what every outgoing President has done since 1792, and peacefully handing it over. We also had the Supreme Court debate on the Republican move to quickly nominate and confirm a new Justice before Election Day. Subsequently, this has shelved any legislative action to give millions of suffering Americans financial relief, which didn’t sit well as Fed Chairman Powell, along with Treasury Secretary Mnuchin, were testifying to Congress with the former essentially pleading with Congress for more fiscal action. However, on Friday, there was some positive talk between House Leader Pelosi and Treasury Secretary Mnuchin toward the end of the week to give a little hope.

    • The S&P 500 declined .63% for the week. The average daily move for the week was 1.3%.

    • The NASDAQ increased 1.1% for the week. The average daily move for the week was 1.5%.

    • The two-year Treasury declined one basis point on the week, closing at .13% Friday.

    • The 10-year Treasury declined three basis points for the week, closing at .66% Friday.

    • The VIX Index increased 42% for the week, closing at 26.38 Friday.

    • The MOVE Index decreased 0.7%, closing at a new all-time low of 36.97 on Friday.

    • 5-year Investment Grade Corporates (as measured by Markit CDX) tightened 10 basis point for the week, closing at 61 basis points Friday, a new post-February low. High-yield corporate debt (as measured by Markit CDX) widened 48 basis points, closing at 399 basis points on Friday.

    • S. Dollar Index increased 1.8%, closing at 94.64 on Friday.

    • WTI Crude decreased 2.6% the week using the November WTI Futures contract, closing at 40.25

    • Gold, as measured by the December 2020 futures contract, declined 4.9% closing at 1,866 on Friday.

    The Week Ahead

    After getting knocked around a bit, global stocks are continuing their strong performance from Friday as we get started. The first Presidential Debate is on Tuesday. This could be a market mover, especially if it gets “ungentlemanly!” Meanwhile, we do not see a lot of positive news on the horizon. Globally and domestically, COVID-19 is heading in the wrong direction as we head into the time of year that many experts have predicted could be catastrophic. As we noted last week, the commercial real estate market in the U.S. is reeling. A variety of valuation experts note that the value of CRE that has gone delinquent and placed with special servicers (workout specialists) has, on average, lost approximately 27%. This story is beginning to pick up steam. Additionally, we have the major U.S. airlines threatening to cut over 50,000 jobs by the end of the week if more financial support is not available. Without a meaningful renewal of the Cares Act, we believe we will start seeing what the original Cares Act avoided—depression-like responses. Maybe we can get a Pelosi-Mnuchin miracle.



    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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