May 8, 2020
Happy Friday morning,
Progress toward reopening the U.S. economy and the development of an effective treatment for the coronavirus helped boost the equity markets yesterday with the Dow, S&P 500 and the NASDAQ gaining 211.25, 32.77 and 125.27 points, respectively. This gain pushed the NASDAQ into positive territory for 2020. Following a strong rally in April, the equity markets are continuing their volatile, but upward trend.
Before the market opened this morning, the Labor Department announced that an unprecedented 20.5 million American workers lost their jobs in the month of April, bringing the unemployment rate of 14.7% and the labor participation rate to 60.2%. Note that in February – just two months ago – the unemployment rate was at a 50-year low at 3.5%. And how did the market react to this announcement? Following the job report, the Dow futures were up more than 200 points, or about 1%, with S&P 500 and NASDAQ futures gaining 0.9% and 0.8%, respectively. At the open this morning (6:30am PDT), the Dow opened up more than 300 points.
How fast businesses can reopen and workers get safely back to work will have everything to do with how quickly the U.S. economy gets back on its feet. Some sectors will open sooner than others, but the trend seems to be a slow, careful opening of certain service businesses. But others may take much longer. An airline executive was quoted yesterday as saying air travel may not be back to 2019 levels for three years.
Happy Mother’s Day to all mothers! We hope you have a great weekend and enjoy what looks to be amazing weather on the Central Coast.