Market Brief May 4, 2020

The markets are unsure. Strange to say it, but the markets do not know what to think of the current situation. The market makers are trying to figure out what happens next. Right now, we are sitting in no man’s land. The volatility has calmed down. Current volatility is less than half from the peak in March. Unemployment is through the roof. 30 million unemployment claims have been filed in the last 5 weeks. The Fed stepped in, like the knight in shining armor and made tremendous moves to help companies and individuals. However, we are not back to business as usual. And we do not have a definitive time frame to do so. And we still have people dying everyday and more are still contracting the virus.

Last Week

The markets went up as states slowing began allowing businesses to reopen. Better news came on Wednesday when the drug company Gilead, announced it’s drug met preliminary goals in a study. The end of the week was not as good. Thursday’s jobless claims piled on an already ridiculously high number. On Friday, news of the U.S. retaliating towards China sent the markets even lower heading into the weekend.

For the week, the Dow finished down 0.22%, S&P 500 down 0.21%, and the Nasdaq down 0.34%.

Looking Ahead

Focus will be on the states that reopened; Georgia, South Carolina, and Tennessee. If there is a spike in virus cases, restrictions may be imposed. If those states do not see a resurgence in virus cases, others might be encouraged to lift their restrictions sooner. The economic data is numbing. The has not been positive economic news as of late. Investors understand it is ugly, and the reports could get worse before improving.

Treasury Secretary Mnuchin has forecast a fall in 2nd-quarter growth, with a bounce back in July. For the year, the Dow is down 16.8%, S&P 500 down 12.4%, and Nasdaq down 4.1%.

Have a safe week!

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