Blog Post

Tech Selloff Continues as Stimulus Remains Stalled

U.S. stock indices ended the holiday shortened week lower with the tech heavy Nasdaq index having it’s worst week since March.  The tech selloff continued on Tuesday, rebounded on Wednesday but continued on Thursday and Friday.  Other indices had smaller declines and the FTSE All World Ex-US index was nearly unchanged.

We continue to see the drop in large cap technology stocks as a healthy correction and not a sign of trouble for the sector that has largely seen increasing earnings.

The Senate failed to approve a scaled back Republican proposal to spend $300BN additional and redirect $350BN of previously approved but unspent funds to provide another round of stimulus payments.  The bill needed 60 votes to advance and failed to win any Democratic votes.  With the House returning to Washington next week we will see if there is progress on bi-partisan negotiations.

Treasury yields fell with the 30-year bond yield at 1.415% and the 10-Year note at 0.67%.  Crude oil fell to $37.49 a barrel and natural gas fell to $2.25 per MMBTUs.  The U.S. dollar index rose to 93.26 and gold prices rose to $1949.90 an ounce.

In the economic numbers this week:

  • China reported that exports in August were 9.5% higher than a year earlier while imports declined.  This happened despite a strengthening of the Chinese currency to the highest level in over a year. 
  • Japan lowered its measure of 2nd quarter gross domestic product to a 28.1% contraction.
  • The Labor Department reported:
    • A seasonally adjusted 884,000 workers filed initial claims for unemployment last week, up 4,000 from the week before.
    • Continuing claims rose from 13.3MM to 13.4MM.
    • The consumer-price index rose 0.4% in August as consumer demand rebounded.  Excluding volatile food and energy prices also rose 0.4% in August.  Used car prices rose 5.4% in August which contributed 40% of the overall rise.  Used car prices had plummeted early in the pandemic as car rental companies trimmed inventories.  Grocery prices actually fell 0.1% after rising sharply during the shutdown.
    • From a year earlier overall consumer prices in August were up 1.3% and core prices were up 1.7%.
  • The EIA weekly oil report is here wpsrsummary.  Also, the EIA reported in the past week:
    • Field production of crude oil rose from 9.7MM barrels per day to 10.0MM barrels per day.
    • Natural gas storage rose by 70BN cubic feet and is above the highest level at this time of year during the past five years.
  • Baker Hughes reported the number of active oil rigs fell 1 to 180.  The number of active natural gas rigs fell 1 to 71.

Please call us if you have any questions.

Best Regards,

Loren C. Rex, CFP®, AIF®, MA                                                   Erik A Smith AIF®

President                                                                                        Managing Partner

Generations Financial Planning & Wealth Management    269-441-4143

77 E. Michigan Ave, Suite 140

Battle Creek, MI  49017

Tel 269-441-4090

Carrie Fuce, Assistant 269-441-4091

Toll Free: 800-513-8180

Fax 866-381-2301

Visit our Website:

Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC.  Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor.  Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated. 

These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.  The Indices mentioned are unmanaged and cannot be invested into directly.


If you are serious about planning for your future, we want to meet with you. We ask that you provide us with some basic information so we can assess your needs and schedule a meeting. Please follow the link below to complete our survey.