5/7/20 Market Notes
Oil prices fell about 2 ¾% on Wednesday as investors around the world looked for safe haven assets such as the U.S. dollar and cash due to rising trade tensions and ongoing worries over the length and depth of the coronavirus related economic impact. The U.S. Treasury Department announced it would issue 20 year bonds to help finance the costs of the various support programs that have been initiated. Separately, the department along with the Congressional Budget Office announced that they expect this year’s deficit to surpass $3.7 trillion. The news sent treasury yields higher, as the 10y yield crossed 0.70%.
Stocks spent most of the day vacillating near the flat line, before a sell-off in the last half hour of trading that pushed the Dow Jones Industrial Average 218 points (0.91%) lower. The S&P 500 declined by 0.70%, as the Technology and Consumer Discretionary sectors were the sole gainers for the day. Energy, Financials, Materials, Real Estate and the Utilities sector all fell well more than 1 ½%. The NASDAQ did end the session in positive territory as large-cap technology shares continued their outperformance.
The reopening of our economy continues to progress, as Simon Property Group announced the reopening of roughly 50 of its malls across the United States in states that have or are preparing to lift their Stay At Home directives. It will be interesting to see what type of foot traffic and consumer behavior materializes once these malls are open.
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.