Stocks rallied last week on hopes of an economic recovery, as states around the country eased coronavirus restrictions. All 50 states have now begun reopening to revive economies decimated by the pandemic. Rules vary state-by-state as well as place-by-place, including restaurants, churches, and schools.
Last week was chockfull of historically dreadful economic reports, which included sharp declines in retail sales and industrial production, along with an additional 3 million Americans claiming unemployment benefits. Global stock markets were down just over 2% for the week … probably not all that bad a result considering the economic damage..
The April jobs report came out on Friday, and as anticipated, the numbers blew away any historical comparison. The bottom line: The U.S. economy lost 20.5 million jobs last month and the unemployment rate rose to 14.7 percent. .
Stock markets had their ups and downs last week, but the three major U.S. indexes ended with only minor declines. The week began with optimism over medical advances and the easing of lockdown constraints, but ended with concerns over jobless claims, corporate earnings, and the collapse of consumer spending.
Global stock markets were down less than 2% for the week. The week included some very challenging economic news along with a collapse in oil prices. Also, let’s not forget that the previous two-week rally was the strongest since the 1930s. When you add it all up, maybe the markets are showing surprising resilience in the face of this pandemic.
Domestic stocks returned about 3% in registering yet another big week. The Dow Industrials are up 15% in just the past two weeks … the best two-week performance since 1938. The week closed with excitement over early results from Gilead Sciences’ antiviral treatment on coronavirus patients. Stocks have now advanced 30% since their March lows, but still remain down just over 10% year-to-date.
U.S. stocks had their best week since 1974 … and it took only four days. Large domestic companies closed up about 12% for the shortened week, while smaller companies, with returns in excess of 18%, were the big winners. Signs of progress against the coronavirus, along with immense monetary and fiscal stimulus, are driving stock market gains.
Global stock markets were down about two percent for the week … an amount that seems rather modest compared to the results for the first three months of 2020. Global equities, reflecting the economic shutdown to combat the coronavirus, declined nearly 14% in March alone and more than 21% for the quarter. Through Friday, all three major stock indexes were down more than 24% from their highs reached on February 19.
To our Valued Clients and Friends:
We hope that you are keeping yourself, your loved ones, and your community safe from COVID-19 (commonly referred to as the Coronavirus). Along with those paramount health concerns, you may be wondering about some of the recent tax changes meant to help everyone coping with the Coronavirus fallout. In addition to the summary of IRS actions and earlier-enacted federal tax legislation, we want to update you on the tax-related provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress's historic economic stimulus package that the President signed into law on March 27, 2020.
The coronavirus pandemic is causing a significant reallocation of labor. Temporary-work agencies, important facilitators of the effort, are reporting unprecedented workforce shifts.