Weekly Market Update 6/26/2020

By June 30, 2020 No Comments

Investors Cautious as Coronavirus Infections Surge

Reopening momentum hit a snag this week as a surge in coronavirus infections in states such as Texas, California, and Florida weighed on investor sentiment by threatening confidence in the pace of the economic recovery.  As a result, the S&P 500 finished lower on the week and ended Friday with notable weakness due primarily to morning headlines about Texas ordering bars to close and restaurants to reduce capacity to 50%.  Later in the day, Florida also announced it would be restricting on- premise alcohol consumption at bars.  The market had already traded skittishly in the first half of the week, but clearly the notion that some of these states might not only pause reopening, but reverse course, spooked investors.  Therefore, traders reduced risk heading into a weekend that will be very closely scrutinized for hospitalization and ICU rates, as well as broader economic reopening efforts. 

The S&P 500 has a few important levels to watch next week as ~3,020 and ~2,980 are the 200-day and 50-day moving averages.  In addition, 3,000 has proven to be a solid level of support for stocks, as it has been tested and subsequently held multiple times earlier this month.

While the recent weakness is certainly something to watch, we want to emphasize that the market response to rising infection data has been very different from March, likely in part because at any moment positive coronavirus treatment or vaccine headlines could quickly alter the news flow and reopening sentiment.  Ultimately, it appears that the market remains cautiously optimistic that some combination of vaccines, treatment, and social distancing will allow reopening to continue, albeit with intermittent and localized setbacks. 

A Look Ahead

Next week will be an abbreviated trading week, as markets are closed on July 3, but coronavirus will likely dominate at least the first half of the week’s trading narrative before Thursday’s employment situation report for June pushes the labor market back into the forefront.


Ian Browning, CFA | Director, Investment Strategies & Shareholder  

Peter E. Simmons, JD | President & CEO 


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