May 12, 2020
Good Tuesday morning,
Amidst a flurry of economic data out this morning, the U.S. equity markets found calm yesterday as the VIX index, a measure of market volatility, continued its slow but steady decline. At the end of trading yesterday, the Dow, S&P 500 and NASDAQ gained 0.47%, 0.41% and 0.43%, respectively. The primary focus remains the same – reopening the U.S. economy, one state at a time, as quickly and as safely as possible. The rising price of oil, now settling in at the mid $20s/barrel, is perhaps the first sign that the demand for oil is rising as the economy slowly reopens.
Earlier this morning, the U.S. Bureau of Labor Statistics released the Consumer Price Index (CPI) data for April showing headline CPI (all products) declined 0.8% month-over-month, the largest monthly decline since December 2008. Core CPI, removing food and energy, declined 0.4% for April, the largest monthly decline since 1957. Year-over-year CPI, from April 2019 to April 2020, increased 1.4%.
It has yet to be seen of the recent events in Washington, DC will spill over into the investment markets. So far, it appears the markets are far more focused on the economics of the moment, and not the politics.