July 8, 2020

Good morning,

The U.S. equity markets took a breather yesterday from their rally of recent months as mega-cap technology stocks lead the way down. Concerns about the resurgence of the coronavirus seems to have soured investor sentiment.

The Dow Jones Industrial Average dropped 396.85 points, or -1.5%.  Likewise, the S&P 500 and the NASDAQ, which hit another record high during the trading day, declined 1.1% and 0.9%, respectively.  Both the NASDQ and S&P 500 snapped a five-day winning streak, while the Dow posted its first loss in the last three sessions.

“One thing I will say is the probability of returning to a nationwide lockdown is incredibility slim,” said Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management.  “So I wouldn’t be surprised to see more of a rolling back-and-forth market rather than one that goes straight up like we’ve seen the past few months.”

“While we expect continued volatility, we think there are grounds for optimism that economies and markets can weather the recent acceleration in infections,” said Mark Haefele, chief investment officer at UBS.  “There are signs that healthcare systems are coping better with COVID-19, reducing the need for restrictions on freedom of movement.  Economic data continues to point to resilience.