U.S. stocks started the week on a positive note but ended it about where they started. As we enter May, many states and countries are beginning cautious steps to reopen economies from economically devastating shutdowns even as the coronavirus continues to spread rapidly around the globe. This week an additional 3.8 million Americans filed for jobless benefits, bringing the total to 30 million. Several major companies issued earnings with mixed results but few willing to provide guidance.

Major Events

• Tuesday – U.S. coronavirus cases officially top one million.
• Wednesday – The Fed kept interest rates near zero and said it expects to continue bond purchases as needed to support the economy.
• Wednesday – U.S. GDP declined 4.8% in Q1.
• Thursday – The S&P 500 completed its best month since 1987. (SPY)
• Thursday – 3.8 million Americans filed for unemployment benefits last week.
• Friday – Gilead’s Remdesivir was cleared by the FDA after showing some promise in treating COVID-19. (GILD)
• Friday – Amazon fell 8% after announcing increased costs are outpacing sales gains in lockdown. The stock remains up 23% for the year. (AMZN)
• Friday – Exxon reported its first loss in decades amid plummeting oil prices. (XOM)
• Friday – Joe Biden denied sexual assault allegations from a former staff member.

Our Take

April was a horrible month for the world, and yet it was also the best month in the U.S. stock market in over 30 years. It is a good reminder that the stock market is related to the economy, but is not the same thing as the economy.

As a changed world charges into May, about 30 states have begun engaging in different approaches to try to reopen. It will be a very interesting challenge as there are widely differing views on what makes sense and how to define success. There is risk that the issue further divides the country. From a market perspective, in addition to infection rates, consumer behavior and employment trends will be important.

Meanwhile, stock prices seem to generally benefit from increased knowledge about the virus, even if the news isn’t all favorable. April was supposed to be about testing, but there wasn’t as much testing done as many hoped, especially for who has already been infected. Hopefully we will learn more in May which will provide insight on how fast the economy may truly reopen. It will be another deadly and volatile month, but potentially an informative and hopeful one as well.