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📰 Conscious Capital Insights for 07/17/2020
This week, China avoids a recession, banks report record loan loss provisions, and the 5 technology companies dominate the U.S. stock market capitalization.
We are a California-based registered investment advisor and thought leader, updating you on this week’s top investment news, research, and market performance.
Chinese Q2 2020 GDP comes in positive, driven by increased industrial activity. (CNBC)
Chinese reported GDP numbers in Q2 2020 showed a growth of 3.2% year-over-year, beating analyst expectations, and avoiding a recession. China had posted a decline in GDP by 6.8%, marking the country’s first decrease in productivity since records were started in 1992. Manufacturing and industrial activity drove the expansion, while retail sales remained weak.
Bank earnings report massive provisions for loan losses, suggesting banks are expecting the worst (NY Times)
Citigroup, JPMorgan Chase, and Wells Fargo set aside a record $28 billion for loan-loss provisions, on top of $19 billion earlier this year. As the banks kicked off the much anticipated Q2 2020 earnings season, the large amounts of reserves that they had accumulated suggested that they are expecting the worst as America struggles though the coronavirus pandemic.
Market breadth at extremes, concentrated amongst 5 technology companies. (Marketwatch)
Five technology stocks now account for 20% of the entire U.S. stock market, as measured by the Wilshire 5000 index. If it weren’t for the “Giant 5,” the U.S. stock market wouldn’t have produced any return over the past few years. “And just as these stocks pulled up the entire market, they can pull down the entire market by their sheer weight,” said Wolf Richter of the WolfStreet blog.
Weekly Price Performance Heatmap (Finviz)
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