News of improvement in US President Donald Trump’s health after testing positive for covid-19 helped Wall Street record sharp gains at the start of the week. Investors welcomed the news of Trump’s discharge Monday night from Walter Reed Medical Center. Stocks climbed despite markets remaining on tenterhooks around the progress in talks on the next fiscal stimulus package.
Stocks finally succumbed to stimulus-related uncertainties and headed south on Tuesday. Contradictory tweets by the US President made the situation worse. Soon after being discharged from hospital, Trump tweeted plans to halt stimulus talks until after the elections. Later last week, he made another U-turn by supporting standalone stimulus for the airlines section and the Paycheck Protection Program, under which money would be transferred to individuals.
House Speaker Nancy Pelosi rejected the idea of individual bills and news of the resumption of talks between House Democrats and the Trump administration on a comprehensive stimulus package grabbed the headlines towards the end of last week.
Performance of US Indices
US stocks rose on Friday with markets remaining hopeful about another fiscal stimulus being announced. The third quarter earnings season is scheduled to begin this week, with major banks set to disclose their results.
The Dow Jones Industrial Average gained 161.39 points to close at 28,586.90 on Friday. The blue-chip index jumped 3.3% last week, notching its best week since August 7. The S&P 500 index rose 0.9% to 3,477.13 on Friday, closing the week higher by 3.8%. The Nasdaq Composite Index recorded a weekly surge of 4.6%, after gaining 1.4% to close at 11,579.94 on Friday. The S&P 500 and Nasdaq also recorded their strongest week since July.
Top US Stocks of the Week
Shares of Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) gained over 7% on Monday following news of Trump’s treatment with its antibody cocktail.
Levi Strauss & Co’s (NYSE: LEVI) shares climbed more than 5% on Wednesday after the company reported a surprise profit in the third quarter. The stock ended the week higher by 7%.
Sunworks, Inc’s (NASDAQ: SUNW) shares spiked 45% on Wednesday after the company announced signing projects worth $10 million during the third quarter. The stock gained around 50% for the week.
On Thursday, Eaton Vance Corp’s (NYSE: EV) shares jumped 48% after Morgan Stanley (NYSE: MS) announced plans to acquire the company for $7 billion. The stock added 53% last week.
Shares of GameStop Corp. (NYSE: GME) climbed 44% on Thursday after the company reported a partnership with Microsoft (NASDAQ: MSFT). GameStop’s stock added 28% during the week.
On Thursday, shares of Domino’s Pizza, Inc. (NYSE: DPZ) tumbled 7% after the company posted weaker-than-expected quarterly earnings. The stock shed 10% last week.
Xilinx, Inc’s (NASDAQ: XLNX) shares climbed 14% on Friday on news of being in late stage talks to be acquired by Advanced Micro Devices, Inc (NASDAQ: AMD) in a $30 billion deal. Xilinx’s stock jumped 18% last week.
Performance of European Indices
European stock closed higher on Friday with investors assessing progress on talks around a covid-19 relief package in the US. Although UK’s economy expanded 2.1% in August, the numbers came in well below market estimates of 4.6% growth.
The Stoxx Europe 600 Index added 0.55% on Friday to close the week higher by 2.1%. The FTSE 100 index rose 0.65% on Friday, closing the week up by 1.9%. The French CAC 40 surged 2.5%, while the German DAX 30 index gained 2.9% last week.
Top European Stocks of the Week
Cineworld’s shares tumbled around 38% on Monday after the company announced plans to suspend operations in the US and its Cineworld and Picturehouse theaters in Britain.
Shares of Rolls-Royce surged around 10% on Tuesday after the company announced an agreement to build a gas power plant for Dhamra LNG Terminal in India.
Shares of Pandora jumped around 17% on Friday after the Danish firm lifted its profit forecast.
Euronext’s shares shed more than 4% on Friday after the London Stock Exchange (LSE) announced the sale of Milan’s Borsa Italiana stock exchange to Euronext for €4.3 billion.
The Forex Market
The US dollar started the week by recording sharp gains versus the Japanese yen but pared back some of the gains towards the end of the week as traders monitored fiscal stimulus developments in the US. Japan’s household spending declined 6.9% in August, following a 7.6% downturn in July. The USD/JPY pair fell 0.4% on Friday but closed the week higher by 0.3%.
The British pound began the week by moving lower versus the US dollar but found positive momentum later in the week. UK’s trade surplus contracted to £1.36 billion in August, from a revised £1.69 billion in the previous month, while GDP growth was recorded at 8.0% for the three months to August. The GBP/USD gained around 0.9% last week after moving higher by 0.8% on Friday.
The Crypto Market
Bitcoin delivered a major rebound last week, surging above the $11,000 resistance level from around $10,600 in the previous week. Over the weekend, Bitcoin traded higher at $11,400, while Ethereum traded close to the $376 level.