The stock market was largely flat on Friday as investors assessed last month’s retail sales data and sentiment was kept in check by a lack of progress from U.S. lawmakers on the next coronavirus stimulus bill.
The Dow Jones Industrial Average was up 0.1%, nearly 50 points, on Friday, while the S&P 500 lost less than 0.1% and the tech-heavy Nasdaq Composite 0.2%.
The S&P has spent much of the week flirting with a new all-time high, unsuccessfully attempting to overtake its previous record of 3,386 set back in February.
Stocks initially opened lower after retail sales rose just 1.2% in July, which was lower than the 2.3% expected, according to the Commerce Department.
Sentiment took a hit from news that U.S. lawmakers are at a “stalemate” and unable to agree on the next coronavirus stimulus bill: It could take weeks for an agreement to be reached, as Congress has now adjourned until September.
House Speaker Nancy Pelosi said she won’t restart discussions until Republicans increase their coronavirus aid offer by $1 trillion, on which the GOP has said it won’t compromise.
Shares of companies that would benefit from a reopening of the economy—including airlines, cruise operators and retailers—rallied on Friday, while shares of Big Tech companies lagged.
Brett Ewing, chief market strategist for First Franklin, says that the S&P 500 will hit “new highs before the election,” giving it a year-end price target of 3,500.
If the S&P 500 does reach a new record high, it would be the index’s fastest recovery from a 30% drop in its history, according to data compiled by Ned Davis Research.
What to watch for
Top U.S. and Chinese trade officials were slated to review the phase one trade deal via a video call on Saturday, but that has now been pushed back due to scheduling issues, Reuters reported on Friday. The agreement, which was signed back in January, has increasingly looked to be at risk given the rising tensions between the world’s two largest economies. What’s more, China’s pledge to purchase some $200 billion of U.S. exports like pork and soybeans is currently behind schedule. The Trump Administration last week issued new sanctions on 11 individuals, including Hong Kong leader Carrie Lam, for “implementing Beijing’s policies of suppression of freedom.” Tensions are also running high in the technology space, with President Trump issuing an executive order to ban any U.S. transactions with popular Chinese app TikTok.
Three ‘Big Impact’ Surprises That Could Slam Stocks, According To Bank Of America (Forbes)
Stocks Fall As Coronavirus Stimulus Talks Stuck In A ‘Stalemate’ (Forbes)
Don’t Expect A Stimulus Deal Until At Least September (Forbes)
Could Competition From Apple Derail Peloton? Not So Fast, Analysts Say (Forbes)
S&P 500 Nears New Record High Amid Coronavirus Vaccine Optimism (Forbes)
Full coverage and live updates on the Coronavirus