4/17/20 Market Notes
After spending much of the day in slight negative territory, stocks rallied in the last hour of trading after reports surfaced that Gilead Sciences (GILD) had made significant findings and progress in the treatment of COVID-19. The news also immediately propelled after-hours equity futures, which continue to point to a sharply higher open. The Dow Jones Industrial Average ended closing 33 points higher, a tepid performance that was hindered by a 8%+ decline in Boeing (BA) shares. The S&P 500 gained 0.58%, while the NASDAQ rose 1.66%. Small caps, as represented by the Russell 2000 index, continued to underperform, falling 0.56%. On a sector basis, six of the eleven sectors comprising the S&P were higher, as Healthcare and Consumer Discretionary shares led markets higher. The energy sector was the worst performer, as oil prices fell to an 18 year low, below $20 per barrel. The Ten Year Treasury yield fell of 0.60%, as the U.S. dollar strengthened to the upper end of its recent trading range. The prospect of a treatment for COVID-19 is wonderful news for everyone, but investors should remain cautious as there remain many questions. A treatment is different than a vaccine and although it would potentially allow for a quicker reopening of our economy, that is far from certain as we don't know yet how effective the treatment is, how long it takes to produce the medicine, and how much can be produced. In other words, look at today's expected rally as a positive step, but expect more market volatility. Looking ahead to next week there will be plenty of earnings reports for investors to digest, as well as some critical economic data.
Monday: IBM and Halliburton report earnings, and the Chicago Fed National Activity Index (March) is released
Tuesday: Netflix, Coca Cola Company, Lockheed Martin and HCA Healthcare all report. March Existing Home sales are released
Wednesday: AT&T, Paypal, Delta Airlines, CSX and Kinder Morgan report.
Thursday: Amazon, Intel Corp, Eli Lilly, and 3M report earnings. The Markit PMI Services and Manufacturing data for April are released
Friday: Verizon, American Express, American Airlines and Sony Corp report earnings. April Consumer Sentiment is reported, as are March Durable Goods orders and Core Capital Goods orders.
Disclosures: This market commentary is written by the 1879 Advisors® and represents the views of 1879 Advisors®. This commentary is not investment advice and should not be used as a basis to make investment decisions. Please consult with your registered investment advisor before making any investment decisions.