New Jersey gets the go ahead to hold high school graduation ceremonies and begin professional sports events. Traders took to the floor of the New York Stock Exchange since it shut down in March. Airlines still losing millions per day. Please enjoy this week's market insights!
Upbeat comments by the Federal Reserve Chairman and more signs of an economic turnaround combined to help fuel a powerful rally in the stock market last week.
The Dow Jones Industrial Average rose 3.29%, while the Standard & Poor’s 500 advanced 3.20%. The Nasdaq Composite index climbed 3.44% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 3.87%.1,2,3
Stocks Cheer Fed Support
After a day digesting those gains, stocks moved another leg higher on strong earnings from big retailers and growing optimism over the global economic recovery. Stocks drifted in the final two days of trading as investors worried about heightening tensions between the U.S. and China.
Different Views on the Economic Recovery
Secretary Mnuchin suggested a wait-and-see approach before moving ahead with additional fiscal measures. He wants to pause new spending in order to first assess the impact of the already-approved stimulus program. He believes that the economy will experience a “V-shaped” recovery.5
Fed Chair Powell, on the other hand, expressed worries that waiting too long for additional fiscal measures may hamper the fragile economic recovery. It was the third time in a week that the Fed Chair suggested more federal spending is needed to help the economic recovery.6
Looking at some “real-time” data can help investors better assess the here-and-now. For example, gasoline deliveries are trending higher, consumer confidence appears to have stabilized, and airlines are seeing more bookings. Even the supply of toilet paper seems less of a concern these days, with Google searches falling to near normal levels.7,8
THIS WEEK: KEY ECONOMIC DATA
THIS WEEK: COMPANIES REPORTING EARNINGS
Source: Zacks, May 22, 2020
1. The Wall Street Journal, May 22, 2020
2. The Wall Street Journal, May 22, 2020
3. The Wall Street Journal, May 22, 2020
4. The Wall Street Journal, May 20, 2020
5. The Wall Street Journal, May 20, 2020
6. The Wall Street Journal, May 20, 2020
7. MarketWatch, May 20, 2020
8. MarketWatch, May 20, 2020