The Major Markets climbed higher for the second week in row with all five major markets ending positive. The gains were largely based on hopes that the domestic market was either at or near the worst phase of the coronavirus outbreak.
As of Monday, the United States continues to have the highest number of confirmed cases by a significant factor with 778,176 cases. The total deaths have reached up to 41,575 which represents a 5.3% mortality rate of this pandemic in the U.S.
As various different local and federal agencies try to develop plans that balance shelter-in-place rules with economic ease and freedom, the economic reports continue to display results that either have never been seen or haven’t been seen in decades.
Oil made headlines for the surge in price at the beginning of the month in the hopes that a production cut between the OPEC+ members would come to fruition. Despite any tentative agreements made between these members, Oil plunged over 20% intraweek, with the June WTI Futures reaching as low as $17.31 on Friday and the GSCI Crude Oil Index ending the week with a YTD loss of 67.87%.
Demand has been an issue as manufacturing has continued to struggle. April’s Empire State Manufacturing Survey saw a drop in the General Business Conditions to -78.2, the lowest on record by a large margin.
While not as substantial of a drop, the Industrial Production Index fell 5.4% for the month of March, reflecting the largest decline since January of 1946.
Housing also was impacted as the NAHB Housing Market Index fell to the record low of 30. Housing Starts declined by 22.3% in March to an annualized rate of 1.216 million units. This is the lowest month over month reading since March of 1984, back when the average 30-year Freddie Mac mortgage was 13.39%, compared to last month’s average of 3.45%
Meanwhile, Thursday’s weekly initial Jobless claims reflected another 5.245 million. This raised the four-week total loss to 22 million.
Employers have struggle to stay open and staffed in this environment. Unfortunately, last week the Paycheck Protection program reached its $350 billion limit. Due to overwhelming demand, many small businesses had not yet applied or were in process of applying for the program. This has already led to debate in Washington D.C. as to what each party’s solution would be to resolve this issue.
Going forward, politicians will continue to debate how and when to reopen the domestic economy and try to return life to a sense of normalcy.
The S&P 500® Index is a capitalization index of 500 stock-designed to measure performance of the broad domestic economy through changes in the aggregate market value of stock representing all major industries.
The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.
The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes over 2,500 companies, more than most other stock market indexes. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indexes
The MSCI World Index, which is part of The Modern Index Strategy, is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI World benchmark does not offer exposure to emerging markets.
The MSCI Emerging Markets (EM) Index is designed to represent the performance of large- and mid-cap securities in 24 Emerging Markets countries of the Americas, Europe, the Middle East, Africa and Asia. As of December 2017 it had more than 830 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country.
The S&P GSCI Crude Oil index provides investors with a reliable and publicly available benchmark for investment performance in the crude oil market.
Companies in the S&P 500 Sector Indices are classified based on the Global Industry Classification Standard (GICS®).