Hi Everyone,
The stock market finished higher on Friday following a relatively calm and choppy session on Wall Street in which investors shrugged off another batch of weak economic data. The Dow was up 260, or 1.1%, to 23,775, the Nasdaq gained 140, or 1.7%, to 8,635, while the S&P 500 rose by 39, or 1.4%, to 2,837. Advancing issues outnumbered decliners by a 3-to-2 ratio on the NYSE, where volume was relatively light.
Traders said that although the afternoon rally was impressive on Friday, a lot of stocks didn’t join the “party” ahead of the weekend break. As one trader explained, “Equities showed resilience to bad news again, which is the hallmark of a bullish market, but the fact that the key breadth measures remain weak doesn’t confirm the positive outlook.”
The slow COVID-19-related improvements continued this week globally. However, risk assets pulled back following the furious post-crash rally due to the mounting economic worries. Stocks finished the slightly chaotic week lower as the historic plunge in the price of oil spooked investors, raising tough questions about the long-term economic effects of the pandemic. The price of crude oil for May delivery fell to an insane minus-$38 per barrel due to the unprecedented demand shock. While energy markets settled down toward the end of the week, the pressure on the sector is unlikely to ease anytime soon. On a positive note, domestic stocks are showing clear signs of relative strength, which bodes well for bulls for the post-virus recovery.
This week’s key economic releases leaned bearish, both domestically and internationally, and the long-term impact of the worldwide lockdowns is still uncertain, despite the global easing efforts. The U.S. economy lost all of the jobs gained since the financial crisis, according to the more than 26 million unemployment claims filed in only five weeks. Durable goods orders, new home sales, and the U.S. and European manufacturing and services PMIs all missed expectations as well, with only the U.S. manufacturing PMI and the Housing Price Index providing something to cheer about for bulls. Treasury yields were drifting sideways this week, as safe-haven flows remain strong even amid the improving COVID-19 news flow.
As always, have a great evening, stay calm, stay home, stay healthy, do your part to flatten the curve and stay tuned!!!
Joe
