Weekly Market Recap – Week Ending May 8th, 2020
What Did The Market Indexes Do?
|Dow Jones Industrial Average||+2.7%||24,331.3||-14%|
|NASDAQ Composite Index||+6.0%||9,121.3||+2.0%|
|S&P 500 Index||+3.6%||2,929.8||-8.7% |
A Strong(er) Week
After a couple of weeks where the market was down, this week saw a nice rebound, with all major market indexes seeing healthy gains (at least compared to the prior few weeks and months). The Dow closed +2.7%, the S&P 500 closed +3.6%, and the NASDAQ had a great week, closing at +6% (and bringing it’s YTD into the positive). This had a lot to do with tech stocks driving the lift.
Job Losses Continue
The projected outcome from the job loss report on Friday was 20% in some expert arenas, so the fact that it came back a shade under 15% was actually a positive. But, we’re sitting at 14.7% unemployment in April and more than 20 million job losses during that time–this is the biggest decline ever recorded.
We’ve seen this before–an inverse correlation between job losses and the stock market–so it could mean that the economy is lagging the market (or vice versa) OR the markets aren’t reacting as negatively to this news as we are.
Dividends are Down
Over the last ~6 weeks or so, 44 different companies in the S&P 500 have either reduced or indefinitely stopped their dividends. For value investors, this is a big hit, as many long-term investors buy dividend-paying stocks and rely on the dividend as a big part of their overall returns.
My take: the market is still all over the place, so this doesn’t exactly surprise me. I feel like as I watch the market, I am constantly going on a rollercoaster of emotion (still). Job losses are up, but so are the markets… Yet dividends are being cut, so what do you invest in? The good news is, I don’t think this will last forever–as it’s a money-saving move for the short-term.
What to Look for in the Coming Week
As we continue to watch the market craziness (and frankly, be stuck indoors without a TON to look forward to), having some market news to anticipate is always exciting. Here’s what is going on this week to make note of:
On Tuesday 5/12, we’ll get an updated look at the Consumer Price Index–a “measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services”–as well as an update on the monthly Federal budget.
Wednesday 5/13 will bring the Producer Price Index–which “measures the average change over time in the selling prices received by domestic producers for their output.”
And on Thursday 5/14, we’ll get an updated tally on unemployment claims in the U.S.
Friday 5/15 rounds out the week with reports on retail sales, business inventories, and industrial production and capacity utilization. We’ll also see the preliminary results from the University of Michigan Index of Consumer Sentiment–which is a REALLY good barometer on how consumers are feeling about the economy (especially during this time).
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