Market Updates

Market Update- May 11, 2020

Posted on May 11, 2020 by RCM Investments

The Week on Wall Street

Despite a historic downturn in employment, stocks managed to climb higher last week as investors were emboldened by the pace of economic re-openings, both here and abroad.

The Dow Jones Industrial Average gained 2.56%, while the Standard & Poor’s 500 advanced 3.50%. The Nasdaq Composite Index jumped 6.00% for the week. The MSCI EAFE Index, which tracks developed overseas stock markets, slipped 1.09%.[i],[ii],[iii]

Tech Stocks Power NASDAQ

Last week’s trading was driven by a crosscurrent of emotions — worries about weak corporate earnings pace of business re-openings as well as optimism over the pickup in economic activity and progress on developing a vaccine.

Stocks posted back-to-back daily gains to end the week despite troubling employment data. Perhaps the headline of the week was that the technology-heavy NASDAQ Composite Index moved into positive territory year-to-date.[iv],[v]

A “Silver Lining” in the Jobs Report?

Last week brought into stark focus the number of jobs lost since the start of the economic shutdown. Since mid-March, unemployment insurance claims have reached 33.5 million. The pace of newly unemployed has slowed down, however, with recent weeks at about half the rate at the peak in late March.[vi],[vii]

April’s employment report, released on Friday, saw a spike to 14.7% in the unemployment rate. As severe as these numbers may be, 88% of April’s newly unemployed characterized their job loss as temporary rather than permanent, as opposed to 47% of the newly unemployed in March who said their job loss was temporary.[viii],[ix]

 

THIS WEEK: KEY ECONOMIC DATA
Tuesday: Consumer Price Index.
Thursday: Jobless Claims.
Friday: Retail Sales; Industrial Production.

THIS WEEK: COMPANIES REPORTING EARNINGS
Monday: Under Armour (UAA), Simon Property (SPG), Caesars Entertainment (CZR).
Wednesday: Cisco Systems (CSCO).

[i] The Wall Street Journal, May 8, 2020
[ii] The Wall Street Journal, May 8, 2020
[iii] The Wall Street Journal, May 8, 2020
[iv] The Wall Street Journal, May 8, 2020
[v] The Wall Street Journal, May 8, 2020
[vi] CNBC, May 6, 2020
[vii] CNBC, May 6, 2020
[viii] The Wall Street Journal, May 8, 2020
[ix] The Wall Street Journal, May 8, 2020

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