Equities Gained This Week As Volatility Dropped Even As Unemployment Rises

Equities Gained This Week As Volatility Dropped Even As Unemployment


Market Indexes:

It was a big up week for the market, with all 4 indexes gaining over 5%, as investors were positive about many states and nations reopening. The small caps led, rising 11%. The added 17.8% for April and May, its biggest two-month percentage gain since 2009.

“U.S. stocks were mostly higher at the open Wednesday, looking for a second straight session of gains, on growing optimism that governments around the world will be able to loosen lock-down measures in place to combat the coronavirus pandemic.” (MarketWatch)

“For a second day this week, stocks most punished by the coronavirus, from Carnival (NYSE:) Corp. to United Airlines, surged as investors anticipate a sharp uptick in spending on non-essential goods and services. The tech-heavy retreated as investors shunned the high flyers that dragged equities off their lows throughout April and much of May. Rising tensions with China also weighed on chipmakers.” (Bloomberg)

Volatility:

The fell 2.3% this week, ending at $27.51, vs. $31.89 last week, but still remains at a heightened level.

High Dividend Stocks:

These high yield stocks go ex-dividend next week: UG, CEO, GARS, RF, SNR, AFIN.

Market Breadth:

26 out of 30 stocks rose this week, vs. 23 last week. 90% of the rose, vs. 86% last week.

FOREX:

The fell vs. most major currencies again this week, except the .

USD Weekly Performance

Economic News:

“The number of Americans seeking jobless benefits fell for an eighth straight week last week, likely as some people returned to work, but claims remained at astonishingly high levels, suggesting it could take the economy a while to rebound as businesses reopen. Initial claims for state unemployment benefits fell 323,000 to a seasonally adjusted 2.123 million for the week ended May 23, the Labor Department said. Claims have declined steadily since hitting a record 6.867 million in late March, but have not registered below 2 million since mid-March.

Economists polled by Reuters had forecast initial claims falling to 2.1 million in the latest week. Layoffs persist in the insurance, educational services, public administration, transportation and warehousing, agriculture, construction, manufacturing and retail trade industries.

That was underscored by other data from the Commerce Department on Thursday showing business spending on equipment plummeting in April and the economy contracting at a much steeper 5.0% annualized rate in the first quarter instead of the previously estimated 4.8% pace.

Data in hand, including on the housing market, manufacturing and consumer spending has left economists expecting gross domestic product could drop in the second quarter at as much as a 40% rate, the worst since the Great Depression.” (Reuters)

Q1 ’s 2nd estimate came in at -5%. Q1 corporate profits fell -13.9%.

Economic Calendar

Week Ahead Highlights:

The May report is due out on Friday and is likely to be rather grim. The may reach -20%.

Next Week’s US Economic Reports:

Sectors:

and led this week, with lagging, on renewed US-China tensions.

Sectors Performance

Futures:

Oil rose once again this week, banking on many US states and foreign nations. starting to reopen. rose 6.23% this week, ending at $35.32.

Futures Performance



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