With all the volatility we have seen over the past several months, last week seemed awfully boring. That’s because I tend to look at the bigger picture, which includes the overall diversified portfolios, and they were essentially flat last week. Stocks were up slightly, with the Dow (+1.8%), the NASDAQ (+0.1%) and S&P 500 (+0.7%) delivering small gains. Meanwhile, diversified taxable bonds were down almost 1% and muni bonds were down about 0.2%. Take the bond losses combined with the small gains from stocks, and you can see how we ended the week almost where we started. For the second week in a row, the Dow outperformed the NASDAQ, which is bucking that several-year long trend of the tech giants exhibiting extraordinary gains. Some pundits say that this is the beginning of the reversal between the Dow and NASDAQ. I’m here to say that after seven years, two weeks doesn’t mean it’s a trend.
Along with the boring performance last week came very little exciting economic news. However, the political front has really begun to heat up, and for the next 2.5 months, we can expect that politics and the forthcoming elections will take over the news and headlines. Last week, Joe Biden selected Kamala Harris as his running mate, and we head into the Democratic National Convention this week followed by the Republican National Convention next week. Let the politics begin to escalate!! I’m sure we will all be glad when it’s over on November 4, as the TV ads and political smearing will finally come to an end. Politics is also taking the forefront as there continues to be arguments on both sides of the aisle regarding COVID relief packages and funding the USPS.