5/1/20 Market Notes
Stocks had their best month in 33 years, as the Dow Jones Industrial Average gained nearly 15%, the S&P climbed 18% and the Russell 2000 index shot up 23%, meaning that broad market indexes are now only down a couple of percentage points from a year ago. The sharp rebound in April may signal the beginning of a recovery for stocks, or could prove to be temporary, only time will tell. Given that the Federal Reserve has pledged to keep interest rates at record lows for an extended period of time, reevaluating your portfolio and looking at it from the perspective of a spending policy rather than income generation may be an astute approach in this new environment. With regards to market action on the last day of April, stocks sold off a bit as the Consumer Discretionary and Communication Services sectors were the sole sectors to gain ground. The Energy, Financials, Industrials and Materials sectors all lost more than 2% on Thursday, as market participants seemed eager from the get go to take some profits. Oil prices continued their volatile streak, closing around $18 per barrel (WTI), which seems reasonable and probably near fair value given the current supply and demand environment. The U.S. dollar was essentially flat, as the benchmark Ten Year Treasury Yield ended at 0.6%. In spite of the sharp rebound in stocks, April was a devastating month for many, as more than 30 million Americans filled for unemployment, a number that is expected to continue to climb. Moreover, medical experts warn that it will take a couple of weeks to learn of the societal and medical impact of lifting the stay at home directives, and that a spike in COVID-19 cases is possible. Nonetheless, there are many positives to focus on as well, including advances in possible treatments to the virus, deliberate actions by many officials in carefully reopening various businesses, and most importantly, a flattening of the curve in many hard hit areas.
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.