The stock market surged dramatically after last two week's losses from fears of the coronavirus, recouping most of the selloffs before dipping slightly back down on Friday.
Total Report (Since October 11th, 2019)
Positive Performing Sectors
1. Healthcare (+13.18%)
2. Information Technology (+11.24%)
3. Consumer Staples (+7.18%)
4. Financials (+6.21%)
5. Industrials (+5.08%)
6. Utilities (+4.56%)
7. Materials (+3.44%)
8. Communication Services (+3.33%)
Negative Performing Sectors
9. Consumer Discretionary (-0.42%)
10. Real Estate (-3.55%)
11. Energy (-11.78%)
Weekly Report (February 7th, 2020)
Positive Performing Sectors
1. Communication Services (+3.98%)
2. Financials (+2.98%)
3. Information Technology (+2.93%)
4. Healthcare (+2.81%)
5. Real Estate (+2.35%)
6. Industrials (+2.20%)
7. Energy (+1.79%)
8. Consumer Staples (+1.52%)
9. Materials (+1.32%)
10. Consumer Discretionary (+0.28%)
Negative Performing Sectors
11. Utilities (-1.16%)
GICS Sector Performance Ratio - Balanced: From 2:9 (18.18%) to 10:1 (90.91%)
Review
After two weeks of negative performance from the coronavirus outbreak in China, the stock market rebounded on Monday after positive reports on manufacturing and technology shares soared. Although another positive jobs report came on Friday, a substantial selloff occurred to cash in on gains made for the week, potentially indicating negative sentiment for next week's trading.
These reactions in the stock market clearly indicates how irrational the trading environment can be, and how equity can be dangerous to rely on. As reviewed before, the coronavirus would have similar reactions to other epidemics in the past, and as shown this week, the stock market rebounded after a certain period of selloffs. The impact was merely a setback, and did not severely hamper overall economic growth to warrant the initial losses. Secondly, it is important to understand that the stock market only tracks the trades made for that particular day, regardless of what news has happened. If more people want to sell that day, then the market will slide into the red. If more people want to buy that day, then the market will rise into the green. It is inevitable that stock supply and demand will meet somewhere in the middle to meet trading needs. It is independent of anything else happening in the world, and thus the stock market never truly reflects the actual state of the economy, only the state of the stock market itself.
It is more important to measure if the stock market performance trend is matching that of the economy. They are linked to one another by the simple principle of how investing works. Investments want to see a return. A business can only gain that return if it is growing and profiting. The economy measures the business. The stock market measures the investment. There will be some discrepancies, but they both should be trending the same overall.
The S&P 500 Dividend Aristocrats list has been updated for 2020. 7 new companies have been added:
Consumer Discretionary (1)
Ross Stores (ROST) - Specialty Retail
Industrials (1)
Expeditors International of Washington (EXPD) - Air Freight & Logistics
Materials (2)
Albemarle Corporation (ALB) - Chemicals
Amcor plc (AMCR) - Containers and Packaging
Essex Property Trust (ESS) - Equity REITs
Realty Income (O) - Equity REITs
Utilities (1)
Atmos Energy (ATO) - Gas Utilities
M1 Finance Platform Referral Link: https://m1.finance/UIl_N9XNA_CO
M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6
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