Friday perfectly reflected the past week-plus of trading, with a roller-coaster session that ended up with mixed results for the broader indices and disappointing finishes for several large tech stocks.
The Dow Jones Industrial Average, which gained 0.5% to 27,665, saw relative outperformance from cyclical plays such as Nike (NKE, +2.8%), Dow (DOW, +2.4%) and Caterpillar (CAT, +2.7%), but weakness in Apple (AAPL, -1.3%), Microsoft (MSFT, -0.7%) and Salesforce.com (CRM, -1.9%).
The decent performance for the Dow came after a better-than-expected August print of the consumer price index, which rose 0.4% month-over-month.
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"The continued firming of prices in the August report, similarly to last month, was partly driven by components impacted by Covid unwinding some of their previous large declines and bouncing back from depressed levels." says Rick Rieder, BlackRock's chief investment officer of global fixed income. "Overall, we think 2020’s broadly deflationary influences may well lead to somewhat higher rates of inflation by mid-2021, yet, importantly, we do not expect this to reach excessive levels."
Other action in the stock market today:
- The S&P 500 closed with a marginal gain to 3,340.
- The Nasdaq Composite finished 0.6% lower to 10,853.
- The small-cap Russell 2000 declined 0.7% to 1,497.
Up next week is a light earnings calendar, but one with a few important economic bellwethers including FedEx (FDX) and homebuilder Lennar (LEN).
How the "Younger Crowd" Invests
In addition to our own analysis of stocks, ETFs and mutual funds, we often highlight the comings and goings of other noteworthy investors.
Researching the recent purchases of billionaires and other institutional investors, as well as their sells, can be educational, given the research resources available to these high rollers. The same goes for the Berkshire Hathaway equity portfolio, which gives us insights not just into one of Wall Street's most legendary investors (Warren Buffett, of course), but also the lieutenants who are being groomed to likely replace him.
Another group of investors worth watching, too: Millennials.
While older generations have much more invested, this generation is already helping to shape Wall Street in several ways, such as the growth of environmental, social and corporate governance (ESG) investing.
The growing importance of ESG standards is coming through loud and clear from corporate communications. FactSet's John Butters notes that in a search for the term "ESG" in conference call transcripts from S&P 500 companies between June 15 through Sept. 5 showed 60 citing the term.
"Although this number is only 12% of the companies in the index," Butters writes, "it reflects a 100% increase compared to the number of companies citing “ESG” in the previous quarter (30) and is the second highest overall number of companies going back at least four years."
Custodian Apex Clearing recently reviewed more than a million Millennial accounts to determine the most popular stocks among this generation's investors. We've looked not just at some of the very top holdings, but also some of the biggest changes made to their portfolios over the wild past few months.
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