Markets “In a Nutshell” for March 31, 2020
Investment Week at a Glance
Stocks finished up for the week. The Dow Jones Industrial Average was up 12.84%, the S&P 500 rose 10.26%, the New York Stock Exchange Composite (2,000 stocks) rose 11.54% and the average investors index (Value Line Index) was up 13.25%. Foreign stocks (DJ Global ex U.S.) were up 9.54%. Bond prices were higher for the week, with the 10-year U.S. Treasury ending the week 20 basis points lower at 0.72%. (Data source: Wall Street Journal)
A Wave of Stimulus
Stocks had one of their best weeks ever as the Federal Reserve and a compromise between Congress and the White House provided a massive wave of stimulus that could dwarf what was done to aid the economy during the Financial Crisis. The Federal Reserve started off the week by saying it would buy an unlimited amount of debt from not only federal and municipal governments, but also corporations. The Federal Reserve has clearly been the fastest mover to combat the damage to financial markets and has been able to use the same playbook that it used during the Financial Crisis at a much quicker pace. Congress and the White House on the other hand moved at a slower pace, but ended up getting a deal signed on Friday that would provide $2 trillion of stimulus to the economy and, unlike what the Federal Reserve is capable of doing, was designed to directly help individuals and businesses. This is likely only the first round of stimulus that will be given to the economy, but it was a crucial first step in combating the effects of the virus. (Barron’s)
Clarity on the Labor Market
U.S. stocks rose in spite of some of the worst, but expected, economic data the U.S. has ever seen in terms of job losses. Initial jobless claims, which tracks the amount of people filing for unemployment for the first time, rose to 3.3 million from about 200,000 a week earlier and crushing the earlier record of just under 700,000. It’s likely that the actual number was higher simply because there wasn’t enough time to file all of these claims, which is what likely sped up the process of Congress and the White House to pass the stimulus bill to boost aid those going on unemployment. The initial jobless claims data comes out on a weekly basis and will be closely watched again this week in conjunction with the monthly jobs report that will show how many people actually lost jobs in the month of March. While all of this data isn’t expected to be completely accurate given the high volume and frequency, it will shed light on just how unprecedented our current situation is. (Barron’s)
With the fall in Oil and Gas prices well documented, what has been the best performing commodity so far this year??
Answer is below.
Have a Great Week!
Answer to quiz:
2. Orange Juice has been the best performing commodity so far this year, rising 23% as demand at grocery stores has skyrocketed. (Wall Street Journal).