Question

Gather and evaluate recent stock market conditions and price changes, using the Dow Jones Industrial Average, the S&P 500, and the NASDAQ indexes. In addition, gather information related to the current economic situation in the U.S. Using all of this information, make a judgment about how the overall stock market will perform through the end of this year. (¾ of page of bullet points)

Answer 1

The information quoted below for the indices is based on Friday (4th Sept 2020) closing.

DOW JONES INDUSTRIAL AVERAGE:

• It closed at 28,133.31 which was 159.42 points lower than the previous day closing
• The change was around -0.56%
• The range of the day was 28,539 to 27,266
• This week the index opened at 28,516 but showed a neutral movement
• There was a tech selloff which dragged the index downward
• But the bullish investor still has a hope of rate cut and fiscal stimulus in the near future.

NASDAQ:

• It closed at 11,622.13 which was 149.24 points lower than the previous day's closing
• The change was around -1.27%
• The day range was 11,846 to 11,145
• Tech roll-outs and soft bank's derivative position dragged it downward

S&P 500:

• It closed at 3429.96 which is 28.10 points below the previous day's closing price
• The change was around -0.81%
• The day range was 3479.15 to 3349.63
• The share of Tesla fell around 6% which was a major contributor for the bearish movement of this index

US economic situation and market conditions:

• Unemployment fell to 8.4% in August from 10.2% in July
• September 15-16 Fed Reserve policy meeting will clarify that interest rate lowering will be done or other QE methods will be adopted
• The current interest rate of the fed fund is 0.25%
• Due to this pandemic, US GDP is forecasted to be -4.9%
• The VIX index grew around April but now has come down to 30.75

The stock market will remain volatile until any vaccine is cracked and the normalcy returns. But as multiple countries are gaining back normalcy and easing their lockdown constraints so they will be a slow bounce back. It is a good time for investment as by year end Bulls will return and it will give a good return.