The Markets (as of market close June 5, 2020)
Despite nationwide protests and U.S.-China tensions, stocks rose to start the week. Apparently, investors focused on progress toward economic recovery instead of other pressing issues. Of the benchmarks listed here, the small caps of the Russell 2000 and the tech-heavy Nasdaq led the way, each gaining more than 0.60% by the end of trading last Monday.
Stocks continued to perform well, as each of the indexes listed here posted notable gains. The S&P 500 rose to its highest level since March 4 while businesses reopen at home and abroad. Energy stocks climbed on hopes of an extension to the current production limits by OPEC. Crude oil prices climbed, the dollar fell, and 10-year Treasury yields advanced as long-term bond prices dipped.
Market indexes enjoyed gains for the third consecutive day last week as each of the benchmarks posted notable gains, led by the Russell 2000 (2.39%), the Global Dow (2.17%), and the Dow (2.05%). Optimism about economic reopening helped keep the rally going last Wednesday. Winning sectors included financials, industrials, and energy stocks.
Claims for unemployment insurance increased for the first time in several weeks, following last Thursday’s report. Stocks ended the day flat to down as the S&P 500 ended its four-session winning streak. Crude oil prices continued to rise, as did long-term bond yields.
To say the data from Friday’s jobs report was unexpected is an understatement. Over 2.5 million new jobs were added in May and the unemployment rate fell by 1.3 percentage points — results that apparently are baffling economists. Investors poured money into stocks, driving the benchmark indexes to remarkable single-day totals. The Russell 2000 and the Dow both posted daily gains in excess of 3.0%. The Global Dow and S&P 500 climbed nearly 2.5%, respectively. And the tech-heavy Nasdaq advanced a little more than 2.0%. While most sectors enjoyed favorable returns, notable performers were found in energy, aerospace, banks, homebuilders, apparel, hospitals, and packaging. Crude oil prices climbed $1.75 for the day. The yield on 10-year Treasuries added 0.08 basis points, or 10.24%.
For the week, the Nasdaq enjoyed the lowest gain, and that was still nearly 3.5%. The small caps of the Russell 2000 soared, gaining more than 8.0%, followed by the Global Dow, the Dow, and the S&P 500. The jobs report stoked the flames of economic recovery. The S&P 500 is up more than 40% from its March low, and Treasury yields climbed to their highest level in 11 weeks as bond prices plummeted. After last week’s push, each of the benchmark indexes listed here are nearing their respective year-end values, with the Nasdaq already nearly 10.0% ahead. In Europe, the STOXX 600 had its best week in months. Asian stocks rose by nearly 5.0%.
Crude oil prices posted their sixth weekly gain, closing the week at $39.16 per barrel by late Friday afternoon, up from the prior week’s price of $35.34. The price of gold (COMEX) sank last week, closing at $1,688.30 by late Friday afternoon, down from the prior week’s price of $1,745.80. For the sixth week in a row, gas prices rose. The national average retail regular gasoline price was $1.974 per gallon on June 1, 2020, $0.014 higher than the prior week’s price but $0.833 less than a year ago. Click for more…Winthrop Partners Market Update 6-8-2020
Thomas Saunders is the Managing Partner of Winthrop Partners. Prior to founding Winthrop Partners, Tom was Senior Vice President at what is now JP Morgan. His career includes senior and executive roles at Brown Brothers Harriman and First Niagara Bank, a top 25 Bank. Click here to contact Thomas Saunders about your investment and planning requirements.