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Weekly Market Insights

The Markets (as of market close​ ​May ​​​2​9, 2020)

With the stock market closed last Monday in observance of Memorial Day, Tuesday's trading led to solid returns for each of the benchmark indexes listed here. The S&P 500 climbed past the 3000 mark for the first time since March, only to trickle below by the end of the day. The small caps of the Russell 2000 led the indexes after climbing 2.77%, followed by the Dow (2.17%), the Global Dow (1.96%), and the Nasdaq (0.17%). Stocks soared for most of the day, only to be tempered later on Tuesday after a report arose that President Trump was considering imposing sanctions on Chinese officials.

The Dow closed up over 2.0% on Wednesday to reach 25,000 for the first time since early March. The S&P 500 gained nearly 1.5%, pushing past 3,000 for the first time since March 5. The Nasdaq was held back by some large tech stocks, yet still managed to close up by over 0.75%. The small caps of the Russell 2000 surged ahead by more than 3.0% by the close of trading last Wednesday. The possibility of cash incentives to get people back to work was another sign that the economy is slowly beginning to rally. Globally, the STOXX Europe 600 index rose 0.2% on the heels of the European Union's proposal of an $825 billion recovery fund to help offset the economic ravages caused by the pandemic.

Fears that President Trump would take action against China sent markets reeling at the end of the day last Thursday. Stocks fell for the first time in four days as each of the U.S. benchmarks listed here closed the day in the red. Only the Global Dow posted a modest gain. Reopening economies provided optimism for foreign investors, pushing European stocks higher. Crude oil prices continued to climb, gaining nearly 2.0% on the day.

Investor optimism remains driven by the prospects of an economic recovery. Stocks surged ahead last Friday and for the week, despite President Trump's condemnation of China for its handling of the pandemic and its increasing attempt to exert control in Hong Kong, although he did not suggest the imposition of further economic sanctions.

For the week, each of the benchmarks listed here posted solid gains, led by the Global Dow, pushed ahead by growing economic hopefulness in both Europe and Asia. The Dow gained nearly 4.0%, followed by the S&P 500, the small caps of the Russell 2000, and the tech stocks of the Nasdaq. Year to date, the Nasdaq is close to 6.0% ahead of its 2020 starting point, while the S&P 500 is quickly closing the gap.

Crude oil prices vaulted ahead again last week, closing at $35.34 per barrel by late Friday afternoon, up from the prior week's price of $33.33. The price of gold (COMEX) rebounded last week, closing at $1,745.80 by late Friday afternoon, up from the prior week's price of $1,734.00. Gas at the pump continues to rise. The national average retail regular gasoline price was $1.960 per gallon on May 25, 2020, $0.082 higher than the prior week's price but $0.862 less than a year ago.

Market/Index

2019 Close

Prior Week

As of 5/29

Weekly Change

YTD Change

DJIA

28,538.44

24,465.16 25,383.11

3.75%

-11.06%

Nasdaq

8,972.60

9,324.59

9,489.87 1.77% 5.76%

S&P 500

3,230.78

2,955.45

3,044.31

3.01% -5.77%

Russell 2000

1,668.47

1,355.53

1,394.04
2.84% -16.45%

Global Dow

3,251.24 2,640.16 2,749.85
4.15% -15.42%

Fed. Funds target rate

1.50%​–1.75%

0.​00%​–0.25%

0.​00%​–0.25%

 0 bps

-150 bps

10-year Treasuries

1.91%

0.65%

0.64%

-1 bps

-​​​​​1​27 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic Headlines

  • The gross domestic product decreased at an annual rate of 5.0% in the first quarter of 2020, according to the second estimate released by the Bureau of Economic Analysis. The GDP increased 2.1% in the fourth quarter. Real gross domestic income decreased 4.2% in the first quarter, in contrast to an increase of 3.1% (revised) in the fourth quarter. The price index for gross domestic purchases increased 1.7% in the first quarter, compared with an increase of 1.4% in the fourth quarter. Consumer prices increased 1.3% in the first quarter, compared with an increase of 1.4% in the fourth quarter.
  • Inflationary pressures remain low, while personal income soared in April, according to the latest figures from the Bureau of Economic Analysis. Prices paid by consumers for goods and services fell 0.5% last month and are up a scant 0.5% over the past 12 months. Personal income and disposable personal income increased 10.5% and 12.9%, respectively. The increased income didn't translate to increased consumer purchases, however. Personal consumption expenditures dropped 13.6% in April. Clearly, these figures were significantly impacted by the pandemic. For instance, personal income expanded but wages and salaries fell. The increase in personal income is attributable largely to unemployment benefits paid.
  • The advance report on international trade in goods revealed a deficit of $4.7 billion in April, 7.2% greater than the deficit in March. Exports decreased 25.2% last month. Imports fell 14.3% from March. Exports and imports for automotive vehicles fell dramatically, declining 68.5% and 55.2%, respectively.
  • Sales of new single-family homes rose by 0.6% in April, according to the latest report from the Census Bureau. However, new home sales are down 6.2% from April 2019. The median sales price of new houses sold in April 2020 was $309,900 ($326,900 in March). The average sales price was $364,500 ($377,400 in March). The estimate of new houses for sale at the end of April was 325,000. This represents a supply of 6.3 months at the current sales rate.
  • New orders for manufactured durable goods in April decreased $35.4 billion, or 17.2%. This decrease, down three of the last four months, followed a 16.6% March decrease. Excluding transportation, new orders decreased 7.4%. Excluding defense, new orders decreased 16.2%. Transportation equipment, also down three of the last four months, led the decrease, down $23.9 billion, or 47.3%. Shipments of manufactured durable goods in April, down three of the last four months, decreased $41.5 billion, or 17.7%. Unfilled orders for manufactured durable goods in April, down two consecutive months, decreased $17.5 billion, or 1.6%. Inventories of manufactured durable goods in April, up two consecutive months, increased $0.7 billion, or 0.2%. On the other hand, nondefense new orders for capital goods in April increased $3.8 billion, or 8.2%.
  • For the week ended May 23, there were 2,123,000 claims for unemployment insurance, a decrease of 323,000 from the previous week's level, which was revised up by 8,000. According to the Department of Labor, the advance rate for insured unemployment claims decreased 2.6 percentage points to 14.5% for the week ended May 16. The advance number of those receiving unemployment insurance benefits during the week ended May 16 was 21,052,000, a decrease of 3,860,000 from the prior week's level, which was revised down by 161,000.

Eye on the Week Ahead

Key economic data out this week focuses on the employment numbers for May. April saw 20.5 million jobs lost and an unemployment rate that soared to 14.7%.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
Market summaries contain information on the Dow, S&P 500, NASDAQ, Russell 2000, Global Dow, Federal Funds interest rate, and 10-year Treasury yields, as well as highlights of past and future economic data.

The Markets (as of market close​ ​May ​​​22, 2020)

The major benchmarks opened the week on a high note, led by the Russell 2000, which gained more than 6.0%. The large caps of the Dow (3.85%) and S&P 500 (3.15%) posted notable gains, as did the Global Dow (3.67%). The tech-heavy Nasdaq climbed nearly 2.5%. Investors were buoyed by positive COVID-19 news. Data showed new cases of the virus were growing at the slowest rate in months. Monday morning, biotech company Moderna reported encouraging results from human testing of a vaccine. This followed Sunday night's remarks from Federal Reserve Chair Jerome Powell that more monetary stimulus may be on the way.

Stocks couldn't keep up with the pace set on Monday, as gains were relinquished by the close of trading Tuesday. Investors seemed to ride the wave of information on a possible COVID-19 vaccine from Moderna. While Monday's report was upbeat, another article on Tuesday questioned the sufficiency of the study's data. Crude oil prices continued to rise, reaching $32.36 by late Tuesday afternoon.

Wednesday saw stocks rebound, led by the small caps of the Russell 2000, which jumped 3.0%, followed by the tech-heavy Nasdaq, and the large caps of the S&P 500 and the Dow. Once again, investors got encouraging news about a vaccine from another biotech firm. As more states relaxed restrictions, investors gleaned hope of an economic restart. Finally, oil prices rose for the fifth consecutive day. Many consumers are noticing higher gas prices at the pumps just in time for Memorial Day and the unofficial start of summer.

Thursday saw stocks dip on news of an additional 2.4 million claims for unemployment insurance last week, pushing the total number of claimants past 25 million. Adding to investor angst is rising trade tension between the United States and China. Energy, tech, and utilities sectors took hits, and gold prices fell while crude oil climbed for the sixth straight trading day. Of the benchmarks listed here, only the Russell 2000 grew, while the remaining indexes ended the day in the red.

Friday was a mixed bag of information and returns in the market. The Dow and Global Dow each fell less than a point while the S&P 500, the Nasdaq, and the Russell 2000 each ticked up less than a point. Trouble between Hong Kong and Beijing sparked protests and drove Asian securities lower, adding to the tensions between the United States and China. On the other hand, states continued to gradually relax stay-at-home orders. The price of crude oil fell for the first time in several days yet closed the week ahead.

Overall, the benchmark indexes listed here posted solid weekly returns, led by the small caps of the Russell 2000, which climbed nearly 8.0%. The remaining indexes ended the week with gains of over 3.0%, respectively. Long-term bond yields remained about the same as bond prices were relatively stable.

Crude oil prices continue to climb, closing last week at $33.33 per barrel by late Friday afternoon, up from the prior week's price of $29.71. The price of gold (COMEX) dipped last week, closing at $1,734.00 by late Friday afternoon, down from the prior week's price of $1,752.50. The national average retail regular gasoline price was $1.878 per gallon on May 18, 2020, $0.027 higher than the prior week's price but $0.974 less than a year ago.

Market/Index

2019 Close

Prior Week

As of 5/22

Weekly Change

YTD Change

DJIA

28,538.44

23,685.42 24,465.16

3.29%

-14.27%

Nasdaq

8,972.60

9,014.56

9,324.59 3.44% 3.92%

S&P 500

3,230.78

2,863.70

2,955.45

3.20% -8.52%

Russell 2000

1,668.47

1,256.99

1,355.53 7.84% -18.76%

Global Dow

3,251.24 2,549.34 2,640.16
3.56% -18.80%

Fed. Funds target rate

1.50%​–1.75%

0.​00%​–0.25%

0.​00%​–0.25%

 0 bps

-150 bps

10-year Treasuries

1.91%

0.64%

0.65%

1 bps

-​​​​​1​26 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic Headlines

  • New home construction took a historic dip in April, according to the latest report from the Census Bureau. Housing starts fell 30.2% in April from March, the largest monthly percentage decline on record. April's rate is 29.7% below the April 2019 rate. Single-family housing starts in April were 25.4% below the March figure. The number of building permits issued in April were 20.8% below the previous month's level and 19.2% under the April 2019 rate. Permits for construction of single-family homes were down 24.3% for the month. Home completions were 8.1% below the March estimate and 11.8% under the rate a year ago. Single-family home completions in April were 4.9% under the March total.
  • Sales of existing homes plummeted for the second consecutive month in April, falling 17.8% from the March sales pace. Overall, sales of existing homes are down 17.2% from a year ago. April's sales have fallen to the lowest level and the largest month-over-month drop since July 2010 (-22.5%). The median price for existing homes sold in April was $286,800, 2.2% higher than the previous month's price ($280,600) and 7.4% over the median price last April ($267,000). Total housing inventory was 1.47 million units, down 1.3% from March and 19.7% lower than the April 2019 total. Unsold inventory sits at a 4.1-month supply at the current sales pace, up from 3.4 months in March.
  • For the week ended May 16, there were 2,438,000 claims for unemployment insurance, a decrease of 249,000 from the previous week's level, which was revised down by 294,000. According to the Department of Labor, the advance rate for insured unemployment claims was 17.2% for the week ended May 9, an increase of 1.7 percentage points from the previous week's rate, which was revised down by 0.2 percentage point from 15.7% to 15.5%. The advance number of those receiving unemployment insurance benefits during the week ended May 9 was 25,073,000, an increase of 2,525,000 from the prior week's level, which was revised down by 285,000.

Eye on the Week Ahead

The last week of the month brings with it the remaining key economic reports for April. Two reports that will warrant particular attention are the gross domestic product report for the first quarter and the personal income and outlays report. This is the second iteration of the first-quarter GDP and is based on more complete data. The initial reading last month saw the economy regress by 4.8% from the fourth quarter of last year. The April report for personal income and outlays is expected to show notable drops in consumer income, spending, and prices for consumer goods and services.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
Market summaries contain information on the Dow, S&P 500, NASDAQ, Russell 2000, Global Dow, Federal Funds interest rate, and 10-year Treasury yields, as well as highlights of past and future economic data.

29348.10

1,355.53
1,355.53

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