US Stock Market Weekly Update April 27- May 1, 2020
All of the major stock indexes ended almost flat this week, but for the whole month of April 2020, the performance of the S&P 500 index was the best for several decades, since 1987 as reported. The main economic theme now is that financial data, including the release of the first-quarter US GDP, showed that an economic recession is almost now a reality, and we will have to wait for the actual date for the second quarter of 2020 to see the magnitude of the negative economic impact the coronavirus crisis will have. Two consecutive quarters of negative economic growth define a recession and we already have the first quarter.
The Fed did not make any further surprise and held the benchmark rate unchanged at 0.0%-0.25% at its last monetary policy decision, and warned about the severe decline in the economic activity and reaffirmed its intention to keep rates near zero until further economic conditions improve. The monitoring will be on key economic indicators such as employment, inflation, and consumer spending.
United States GDP Growth Rate
“The US economy shrank by an annualized 4.8 percent in the first quarter of 2020, ending the longest period of expansion in the country's history, an advance estimate showed. It was the steepest pace of contraction in GDP since the last quarter of 2008, much worse than market consensus of a 4.0 percent slump, as the Covid-19 pandemic forced several states to impose lockdown measures in mid-March, throwing millions of people out of work. Household consumption fell the most since the fourth quarter of 1980 and business investment contracted for a fourth consecutive period. Also, exports and imports were down sharply, while residential fixed investment rose as well as government spending.”
Source: Trading Economics
For the week of April 27– May 1, 2020, the major US stock market indexes closed as follows on Friday, May 1, 2020:
• Dow Jones Industrial Average: Close 23723.69, -0.22% for the week, -16.87% Year-to-date (DIA)
• S&P 500 Index: Close 2830.71, -0.21% for the week, -12.38% Year-to-date (SPY)
• NASDAQ: Close 8604.95, -0.34% for the week, - 4.10%, Year-to-date (QQQ)
• Russell 2000: Close 1260.48, +2.22% for the week, -24.45% Year-to-date (IWM)
Weekly Stocks Gainers
These are the top 3 gainers, stocks with 5 days of consecutive price advances:
1. Milestone Pharmaceuticals Inc (MIST) Close 3.97, 5-day change +75.66%
2. U.S. Silica Holdings Inc (SLCA), Close 2.34, 5-day change +62.50%
3. Iterum Therapeutics Plc (ITRM), Close 3.70, 5-day change +38.58%
Weekly Stocks Losers
These are the top 3 losers, stocks with 5 days of consecutive price declines:
1. Chesapeake Energy Corp (CHK), Close 14.98, 5-day change -62.49%
2. Allied Healthcare (AHPI), Close 9.08, 5-day change -29.34%
3. Benitec Biopharma Ltd (BNTC), Close 8.44, 5-day change -22.78%
Economic events for the week May 4- May 8, 2020:
Important economic data for this week will be the Markit Services PMI, the USD ADP Employment Change, the USD Initial Jobless Claims, and mostly on Friday, May 8, 2020, the USD Nonfarm Payrolls and the USD Unemployment Rate. The earnings season continues this week, and any big misses or downward revisions for the economic outlook by companies may add further volatility to the stock market.
Stock market commentary
Warren Buffett at the annual 2020 Berkshire Hathaway (BRK-A) shareholders meeting mentioned: " I don't know what's next for stocks, and I don't think anyone knows". Also that the world has changed and that his company dumped a recent stake in airline stocks. We cannot argue with Warren Buffett. The world has changed and suddenly the fundamentals were revised. The expected recovery for the US economy and the global economy is still unknown, and whether it will be a U-shaped or L-shaped recovery. Or even a V-shaped recovery for a quick economic rebound. We must wait to have actual data and then analyze it.
Sources:
https://quotes.wsj.com/index/US/COMP
https://www.barchart.com
https://www.fxstreet.com/economic-calendar
Disclosure: I have no position in any stock mentioned