Winthrop Partners Weekly Updates 5-18-2020

The Markets (as of market close May 15, 2020)

Stocks opened the week with mixed returns. The S&P 500 stayed level, the Dow fell by almost half a point, and the Nasdaq finished the day up three-quarters of a percent. Crude oil prices dropped by nearly one percent. Positive news came from New York last Monday as Governor Cuomo indicated some businesses would be able to reopen on a regional basis, as the state reported the lowest number of COVID-19-related deaths since March.

The major indexes tumbled last Tuesday, halting a multiday win streak for the Nasdaq. The Dow lost over 450 points, or 1.89%, its largest one-day percentage drop since May 1. Both the S&P 500 and the Nasdaq fell more than 2.0%. Grim news on the COVID-19 front seems to have driven the market. Several countries that had begun to ease restrictions saw a spike in new virus cases reported. Wuhan, the Chinese city that reported the first cases of COVID-19, had people test positive for the first time in more than a month. Finally, Dr. Anthony Fauci, head of the U.S. National Institute of Allergy and Infectious Diseases, in testimony before the Senate, warned that reopening the nation too soon and without caution and expanded testing could lead to “needless suffering and death.”

Stocks were sent reeling last Wednesday following Federal Reserve Chair Jerome Powell’s warning against the likelihood of a rapid economic recovery. Powell also suggested that Congress enact further economic stimulus to ease the risk of long-lasting economic damage as the country tries to recover from the pandemic. Each of the major benchmark indexes listed here plunged deeper into the red by the end of the day’s trading. The Russell 2000 dropped 3.3%, and the Dow slid close to 2.2%. The Nasdaq, which had surpassed its year-end value following a series of daily gains, fell back into negative territory for the year.

Thursday saw nearly 3 million new claims for unemployment insurance, bringing the total of those receiving unemployment insurance benefits to almost 23 million. Despite that report, investors returned to the market, pushing the major indexes higher. The Dow gained over 377 points, or 1.63%, the S&P 500 pushed ahead by 1.15%, and the Nasdaq rose by nearly 1.0%. Stocks of some major banks surged Thursday, driving the large-cap benchmarks.

Stocks closed Friday higher, but not enough to recover from midweek losses, ultimately ending last week’s trading on the downside. Last Friday was full of conflicting information for investors to digest. Retail sales posted historic losses, the trade war with China was rekindled, and the House of Representatives was set to vote on an additional $3 trillion COVID-19 relief package. By the close of trading last Friday, each of the benchmark indexes listed here lost value, led by the small-cap Russell 2000, which dropped nearly 5.5%. The Global Dow fell by more than 3.3%, followed by the large caps of the Dow and the S&P 500. The Nasdaq ended the week down a little more than 1.0%, but not enough to pull it below its year-end value. The other major indexes remain well below their 2019 closing marks, however.

With production curtailed, crude oil prices are steadily rising. Prices closed last week at $29.71 per barrel by late Friday afternoon, up from the prior week’s price of $24.81. The price of gold (COMEX) continued to climb last week, closing at $1,752.50 by late Friday afternoon, up from the prior week’s price of $1,708.00. The national average retail regular gasoline price was $1.851 per gallon on May 11, 2020, $0.062 higher than the prior week’s price but $1.015 less than a year ago.  Click here for more information:Winthrop Partners Weekly Update 5-18-2020