Market Indexes:
The market had solid gains this week, led by positive reopening sentiment, increased potential for a COVID vaccine, and yet another stimulus package being discussed in DC. The Russell small caps led, gaining nearly 8%, with the DOW, NASDAQ, and the S&P 500 all gaining over 3%.
“International stocks took a hit and the Chinese yuan weakened on Friday as Beijing moved to impose a new security law on Hong Kong after last year’s pro-democracy unrest, further straining fast-deteriorating U.S.-China ties. These tensions plus news that China has dropped its annual economic growth target for the first time added to concern about the fallout from the COVID-19 pandemic, knocking oil prices down more than 4%.
Japan’s central bank on Friday unveiled a lending programme to channel nearly $280 billion to small businesses hit by the coronavirus. India slashed rates for a second time this year and in the minutes from its last meeting, the European Central Bank said it is ready to expand emergency bond purchases as early as June.” (Reuters)
“Wall Street’s main indexes surged on Monday as encouraging early data from a potential coronavirus vaccine trial boosted sentiment, with investors also counting on more stimulus to rescue the economy from a deep slowdown. Drugmaker Moderna (NASDAQ:MRNA) said its experimental COVID-19 vaccine showed promising results in a small early stage trial, boosting futures in premarket trading. Its own shares jumped 14%. (Reuters)
Volatility:
The VIX fell 12% this week, ending at $28.16, vs. $31.89 last week, but still remains at a heightened level.
High Dividend Stocks:
These high yield stocks go ex-dividend next week: BKCC, CXP, FFBC, PBB, PFG, RILY.
Market Breadth:
23 out of 30 Dow stocks rose this week, vs. 7 last week. 86% of the S&P 500 rose, vs. 17% last week.
FOREX:
The USD fell vs. most major currencies this week, except the yen.
Economic News:
Another 2.438 million Americans filed for first-time jobless claims last week, lower than previous weeks, but still highly elevated.
“U.S. homebuilding dropped by the most on record in April and permits for future construction tumbled, underlining fears that the novel coronavirus crisis would lead to the deepest economic contraction in the second quarter since the Great Depression. Housing starts tumbled 30.2% to a seasonally adjusted annual rate of 891,000 units last month, the lowest level since early 2015. The percentage decline was the biggest on record. Housing starts dropped 29.7% on a year-on-year basis in April. Homebuilding fell in all four regions last month. ” (Reuters)
Week Ahead Highlights:
US markets will be closed on Monday, in observance of Memorial Day. The 2nd estimate for Q1 GDP will come out on Thursday.
Next Week’s US Economic Reports:
Sectors:
Industrials andEnergy led this week, with Healthcare lagging.
Futures:
Oil rose once again this week, banking on many US states and foreign nations. starting to reopen. WTI rose 13.8% this week, ending at $33.56.
“Oil futures ended higher on Thursday, with U.S. prices holding ground at their highest in about 10 weeks. Global declines in crude production along with expectations for a gradual recovery in demand continued to provide support for prices, but renewed U.S.-China trade tensions pulled prices away from the session’s highs, analysts said.” (MarketWatch)
