5/21/20 Market Notes
On Wednesday, equities shrugged off mostly dour minutes from last month’s federal reserve meeting, focusing instead on the here-and-now optimism that economies are slowly reopening and that a cure will eventually be found. The S&P 500 rose 48.67 points, and is now up over 30% from the March lows. At 2,971.61 the index is up 3.74% from a year ago and down roughly 12.5% from its pre-virus high. The Dow was up 369.04 (1.52%), and Nasdaq up 190.67 (2.08%). Equity performance so far this week continues to favor the most beaten up sectors and names, including oil, with WTI crude posting its sixth consecutive gain on reduced storage concerns. Cruise lines, airlines, department stores, casinos and auto manufacturers are also among the top movers. Looking ahead, equity markets are poised to open with some softness based on increasing US and global tension with China. Today’s economic calendar is robust and includes: leading indicators, jobless claims, existing home sales, Philly Fed manufacturing Index, PMI/NM-PMI, comments from FOMC members, and Fed Chair Powell speaking at 2:30. On the whole, we are encouraged by signs of economic renewal including increasing summer bookings on Expedia, improving gasoline sales, and an uptick in restaurant reservations on Opentable. We believe volatility will continue to trend downward through the summer as uncertainty gives way to more clarity about the future state of the world, and how we ultimately cope with coronavirus. There will be some bumps along the way, with Q2 earnings reports a potential source of risk, but just like aftershocks to an earthquake; they’re usually not as large and slightly more predictable than the original event. Sincerely,
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.