May 7, 2020
The Dow and S&P 500 tracked about flat most of the day yesterday that is until the last hour of trading when both indices declined rapidly. At the close of trading, the Dow dropped 218.45 points, or 0.91%, and the S&P 500 declined 20.02 points, or -0.70%. The NASDAQ, containing many of the big name technology stocks, held on to its gains to finish the day up 45.27 points, or +0.51%.
With the release of anther rather dismal unemployment report this morning – 3.2 million new jobless claims for the week ended May 2 – the U.S. equity markets are back in rally mode again. As of 7:30am PDT, the Dow is up nearly 300 points with the NASDAQ posting a gain of more than 100 points.
While the today’s unemployment report shows millions of more Americans out of work, the rate of growth from week to week continues to decline. This, along with the many cities across the nation getting back to work under various restrictions, seems to indicate we may have begun recovery mode from the coronavirus.
We are paying attention to the Federal Reserve, and if they determine that additional stimulus – monetary policy – is needed to bolster the U.S. economy. Stimulus checks are just now getting out, and a new wave of PPP loans from the Treasury continue to get in the hands of business owners helping them keep their workers employed. This may be a short-term indicator of how well and how rapidly the U.S. economy will get back up and running.
Stay safe and healthy.