The Week on Wall Street
Despite a historic downturn in employment, stocks managed to climb higher last week as investors were emboldened by the pace of economic re-openings, both here and abroad.
The Dow Jones Industrial Average gained 2.56%, while the Standard & Poor’s 500 advanced 3.50%. The Nasdaq Composite Index jumped 6.00% for the week. The MSCI EAFE Index, which tracks developed overseas stock markets, slipped 1.09%.[i],[ii],[iii]
Tech Stocks Power NASDAQ
Last week’s trading was driven by a crosscurrent of emotions — worries about weak corporate earnings pace of business re-openings as well as optimism over the pickup in economic activity and progress on developing a vaccine.
Stocks posted back-to-back daily gains to end the week despite troubling employment data. Perhaps the headline of the week was that the technology-heavy NASDAQ Composite Index moved into positive territory year-to-date.[iv],[v]
A “Silver Lining” in the Jobs Report?
Last week brought into stark focus the number of jobs lost since the start of the economic shutdown. Since mid-March, unemployment insurance claims have reached 33.5 million. The pace of newly unemployed has slowed down, however, with recent weeks at about half the rate at the peak in late March.[vi],[vii]
April’s employment report, released on Friday, saw a spike to 14.7% in the unemployment rate. As severe as these numbers may be, 88% of April’s newly unemployed characterized their job loss as temporary rather than permanent, as opposed to 47% of the newly unemployed in March who said their job loss was temporary.[viii],[ix]
THIS WEEK: KEY ECONOMIC DATA
Tuesday: Consumer Price Index.
Thursday: Jobless Claims.
Friday: Retail Sales; Industrial Production.
Source: Econoday, May 8, 2020
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
[i] The Wall Street Journal, May 8, 2020
[ii] The Wall Street Journal, May 8, 2020
[iii] The Wall Street Journal, May 8, 2020
[iv] The Wall Street Journal, May 8, 2020
[v] The Wall Street Journal, May 8, 2020
[vi] CNBC, May 6, 2020
[vii] CNBC, May 6, 2020
[viii] The Wall Street Journal, May 8, 2020
[ix] The Wall Street Journal, May 8, 2020