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Market Recap (August 3 2020)

August 03, 2020
The markets ended the week mixed, with the Dow Jones modestly lower while both the S&P 500 and NASDAQ posted solid returns. Market movement was driven by several factors including second quarter earnings reports, second quarter gross domestic product (GDP) numbers and of course the ongoing coronavirus epidemic. 
The second quarter GDP numbers were a prominent story as they report the most significant contraction of the U.S. economy ever measured: the economy shrank by 32.9% on an annualized basis. However, there is more to the story: we know these numbers were the result of the self-imposed economic shutdown. We also have begun reopening our economy and expectations are that moving forward our numbers will improve significantly.
Also of note is last week’s meeting of the Federal Reserve. The Fed reaffirmed its commitment to supporting the U.S. economy using its full range of tools. It decided to keep its benchmark interest rate unchanged and noted in a statement* that, “the path of the economy will depend significantly on the course of the virus.”
Looking forward, this week we will continue to see earnings reports for second quarter. There will also be several key measures of employment numbers. 
S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market. The NASDAQ is an index that tracks the cumulative results on a market capitalization basis of all stocks trading in the NASDAQ system. . Investors cannot invest directly in an index. Past performance is no guarantee of future results. Gross Domestic Product (GDP) is a measure of output from U.S factories and related consumption in the United States. It does not include products made by U.S. companies in foreign markets. The Federal Reserve System (the Fed) is the central banking system of the United States and controls the Federal Funds Rate (aka Fed Rate), an important benchmark in financial markets used to influence the supply of money in the U.S. economy.
*Quote is from the July 20, 2020 Press Release from the Board of Governors of the Federal Reserve System. It can be found at the following link: