Economic update for the week ending September 12, 2020

Stocks declined for the second straight week – Although all stock market indexes were down, tech stocks were hit especially hard. The tech-heavy NASDAQ fell 4.1% for the week. It’s now dropped over 10% from its all-time high less than two weeks ago. To be fair, it’s still up 21% year to date. This week’s drop was a combination of several issues: Some investors felt the market’s incredible rise over the last 90 days had caused stock prices to become overinflated and took profits. There were also fears of a setback in a leading vaccine trial when one participant developed an unexplained illness. Perhaps the largest factor of the past two week’s declines was the realization that a stimulus package once thought of as a done deal may not happen until after the election. The Dow Jones Industrial Average closed the week at 27,665.64, down 1.7% from 28,133.31 last week. It’s down 3.1% year-to-date. The S&P 500 closed the week at 3,340.97, down 2.5% from 3,426.96 last week. It’s up 3.4% year-to-date. The NASDAQ closed the week at 10,853.55, down 4.1%, from 11,313.14 last week. It’s up 21% year-to-date.

 

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 0.67%, down from 0.72% last week. The 30-year treasury bond yield ended the week at 1.42%, down from 1.46% last week.

 

Mortgage rates – The September 10, 2020, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 2.86%, down from 2.93% last week. The 15-year fixed was 2.37%, down from 2.42% last week. The 5-year ARM was 3.11%, up from 2.93% last week.

Housing sales data for August should be released next week. That data will be on next week’s update.