Hi Everyone,
The stock market had its best day in two weeks, as the global COVID-19 outlook improved over the weekend, and investors started to “price in” a relatively short lockdown period. The Dow was up 1,627 or 7.7%, to 22,680, the Nasdaq gained 540, or 7.3%, to 7,913, while the S&P 500 rose 175, or 7.0%, to 2,664. Advancing issues outnumbered decliners by a 10-to-1 ratio on the NYSE, where volume was heavy.
Traders said that volatility continues to decline on Wall Street, and while today’s rally might just have been another short-covering move, financial markets continue to normalize. As one trader explained, “The Volatility Index (VIX) continued to drop today, hitting its lowest level in almost a month, and while bears might regain control soon, market conditions are likely to further improve as the virus-related uncertainty decreases.”
While the slight improvement in the number of U.S. COVID-19 cases is a positive sign, it’s too early to say that we are seeing the effects of the containment measures or just a statistical blip due to the weekend. That said, the fact that the numbers in New York are not rising at an exponential pace is a huge plus, with the European development also improving the U.S. outlook. U.S. officials still expect a deadly week, and several experts reiterated that easing the social distancing measures prematurely could lead to secondary outbreaks both in Europe and the U.S.
The price of oil and, in turn, the energy sector had another crazy day, as the rampant speculation regarding the outcome of the Saudi-Russian skirmish caused wild swings. The talks broke down over the weekend, leading to the postponement of the emergency OPEC+ meeting, but today, Russian sources confirmed that an agreement is near. The daily supply cut might even exceed the rumored 10 million barrels, which could stabilize the price of oil and give some breathing room for the battered energy sector, even considering the massive drop in global demand.
As always, have a great evening, stay calm, stay home, stay healthy, do your part to flatten the curve and stay tuned!!!
Joe
Marketing Research Commentary