4/30/20 Market Notes
Investors got a slew of economic data on Wednesday, including news that GDP contracted 4.8% in the first quarter, worse than analyst had predicted, but better than some feared. Pending Home Sales fell 21% in March, also worse than expected, however new weekly mortgage applications unexpectedly rose last week. The latter data point could be an indication that the housing market is more resilient than many feared, and that a commitment by the Fed to keep rates low will help support that segment of our economy. Stocks soared from the get go, as the Dow Jones Industrial Average opened nearly 400 points higher and closed 532 points higher, or 2.21%). The S&P gained 2.66%, while the NASDAQ rose 3.57% and the small cap Russell 2000 index gained 4.83%. On a sector basis, the Energy sector was the big winner, gaining 7.35% as oil prices surged and are now back at $17.50 per barrel. The Communication Services and Technology sectors gained 5.05% and 4.22% respectively, while Consumer Staples and Utilities declined slightly. The Federal Reserve Open Market Committee released its meeting minutes yesterday, which didn’t present any surprises. During his press conference, Fed Chair Jerome Powell assured market participants that the Fed would deploy additional measures to support markets as needed and would keep interest rates near zero until both inflation and full employment return, which most estimate could take years. Looking ahead, earnings will keep rolling in, and given the recent strong beats by Microsoft and Alphabet, investors might raise their expectations for other technology companies. Today’s major earnings releases include Apple (AAPL), Amazon (AMZN), Visa (V), McDonalds (MCD), and Gilead Sciences (GILD). On the economic front, market participants will get the latest weekly unemployment data, Chicago PMI, Personal Income and Consumer Spending data.
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.