Week of Aug 28, 2020 Weekly Recap & The Week Ahead
Tuesday, September 1st, 2020“Do more of what works and less of what doesn’t.” – Steve Clark
1. Dow Jones Industrial Average (DJIA) Shuffles Members — Salesforce, Amgen and Honeywell to be added to DJIA while Exxon, Pfizer and Raytheon will be removed; The changes will take place Aug. 31 and were prompted by Apple Inc.’s AAPL, -1.86% decision to carry out a 4-for-1 stock split, reducing the index’s tech-sector weighting. “The announced changes help offset that reduction.
2. U.S. Sanctions Chinese Firms and Executives Active in Contested South China Sea — The U.S. unveiled a set of visa and export restrictions targeting Chinese state-owned companies and their executives involved in advancing Beijing’s territorial claims in the contested South China Sea, a new challenge to China involving the strategic waters. The U.S. added 24 Chinese companies active in the South China Sea—including five CCCC subsidiaries—to a Commerce Department list that restricts U.S. companies from supplying U.S.-origin technology to them without a license.
3. Fed Approves Shift on Inflation Goal, Ushering in Longer Era of Low Rates— The Federal Reserve announced a major policy shift, saying that it is willing to allow inflation to run hotter than normal in order to support the labor market and broader economy. The central bank formally agreed to a policy of “average inflation targeting.” That means it will allow inflation to run “moderately” above the Fed’s 2% goal “for some time” following periods when it has run below that objective.
4. Trump to Announce Deal With Abbott Laboratories for 150 Million Rapid Covid-19 Tests — President Trump is expected to announce a $750 million deal to buy 150 million rapid Covid-19 tests from Abbott Laboratories, a move that would substantially expand the nation’s capacity for rapid testing. The Food and Drug Administration on Wednesday granted emergency-use authorization to the company for a $5 rapid-response Covid-19 antigen test that is roughly the size of a credit card. The test could be administered in a doctor’s or school nurse’s office and uses technology similar to home pregnancy tests. It returns results in about 15 minutes. Abbott said Wednesday it plans to ship tens of millions of the tests in September and expects to increase production to 50 million tests in October. The October total would be roughly double the number of tests performed in the U.S. in July. Abbott said its data show the new antigen test has demonstrated sensitivity—the percent of positive cases a test accurately detects—of about 97%. Rapid antigen tests are generally thought to be less sensitive than lab-based PCR tests.
The week ahead — Economic data from Econoday.com: