Markets “In a Nutshell” for April 28, 2020
Investment Week at a Glance
Stocks finished down for the week. The Dow Jones Industrial Average was down 1.93%, the S&P 500 fell 1.32%, the New York Stock Exchange Composite (2,000 stocks) fell 1.70% and the average investors index (Value Line Index) was down 0.33%. Foreign stocks (DJ Global ex U.S.) were down 1.81%. Bond prices were higher for the week, with the 10-year U.S. Treasury ending the week 3 basis points lower at 0.60%. (Data source: Wall Street Journal)
Stocks Down in Wild Week
Stock indexes around the world finished down for the week as the rise in daily cases of the coronavirus have begun to plateau. Despite the flattening curve, the economic impact continues to look more devastating by the week. In one of the many firsts that the world has experienced in past couple of months, U.S. oil prices had negative prices for a day last week, meaning the sellers of oil contracts were actually paying buyers to take oil away from them. Global demand for oil has plummeted, while producers have resisted pumping oil, resulting in a massive strain on storage capacities in the U.S. Meanwhile in the labor market, another 4.4 million workers applied for initial jobless claims. This weekly figure has trended down in the past 3 weeks, but remains more than 6 times the previous record before the shutdown. As a result of all of this continuing grim news, stocks slid 2% ending a run higher from the bottoms experienced in March. Uncertainty continues to mount for the economy post-virus, but the best thing for markets up to this point has continued to be a sense of control of the virus’ spread. (Barron’s)
1st Quarter GDP This Week
The Bureau of Economic Analysis releases its 1st Quarter GDP report this week and is expected to come in at an annualized 4% contraction, signaling the official beginning of the recession. As late as mid-February, the same economists were expecting close to 3% growth in the U.S., highlighting just how quickly everything has changed around the world. The report will be one of the first holistic government reports that economists and investors will be able to analyze to see exactly where in the country and economy we are hurting the most. While the report will more than likely be a confirmation of what we largely already know, the more detailed aspects of the report will shed more light on future of the economy.
In the midst of oil prices falling into negative territory and the S&P 500 posting a down week, what was the weekly return for the Oil & Gas industry last week?
Have a Great Week!
d) The S&P Dow Jones Oil & Gas industry rose 1.89% last week and was the best performing industry in the U.S. (Barron’s).