Well, we had a very nice holiday-shortened week, as the Dow (+3.2%), NASDAQ (+4.6%) and S&P 500 (+4.1%) were all up very nicely last week. The markets rallied based on the Bureau of Labor Statistics (BLS) jobs report showing that 4.8 million jobs were gained in June, lowering the unemployment rate to 11.1% (from 13.3% at the end of May). That’s still very high by historical measures, and the second wave of Coronavirus cases could adversely impact those numbers heading into July. Diversified bond and muni bond funds were also up about 0.1% - 0.3% last week.
For the month of June, the Dow (+1.8%), NASDAQ (+5.3%) and S&P 500 (+2.8%) were also up, but the NASDAQ’s continued outperformance demonstrates that technology stocks are generally outperforming other sectors of the markets. Diversified taxable bonds were up around 1.5% and have reached or exceeded their pre-COVID values. Muni bonds continued their recovery, up about 2% - 3% in June, but still lag their pre-COVID values by about 3% - 5%. Investors should be receiving their statements in the coming days, and diversified portfolios gained roughly 2% - 3% for the month.
For the second quarter of 2020, the Dow (+18.5%) and S&P 500 (+20.5%) demonstrated their best quarters since 1987 and 1998, respectively. During that same period, the NASDAQ also gained 32.6%, bringing the NASDAQ’s YTD gain to 13.8% through June 30. However, the Dow (-9.5%) and S&P 500 (-3.1%) are still down for the year. Meanwhile, diversified taxable bond funds returned about 6% and muni bond funds returned about 3% for the quarter. Investors in diversified portfolios will see gains of about 10% - 20% for the quarter, depending on the level of aggressiveness of their portfolios. No matter how you look at it, we had a very good quarter, but that was also on the heels of a bad quarter. In the end, the second quarter has mostly offset the losses from COVID, with most diversified portfolios returning to their values at the beginning of the year.