Stocks posted gains in July in spite of gloomy news on the economic and pandemic fronts. Investors continued to trust equities despite the gross domestic product falling nearly 33.0% in the second quarter, mixed quarterly corporate earnings results, emerging pandemic
Stocks surged early last Monday only to fall back by the end of the day. Earlier in the day, the S&P 500 reached its highest level since the COVID-19 pandemic sent equities reeling. The Nasdaq hit another record high in early trading. Unfortunately, stocks couldn’t hold their values as states hard-hit by growing numbers of reported virus cases began to rein in reopening measures. European stocks climbed last Monday as did Treasury bond yields. Crude oil prices dipped ahead of an OPEC meeting that could result in plans to ease production cuts.
The current recession officially began in February of this year. This was no great surprise considering widespread business closures due to the coronavirus pandemic and the resulting spike in unemployment, but it was an unusually quick official announcement.
You may be wondering how the recovery will unfold.Most economists believe that GDP will turn upward in the third quarter, but it will take sustained growth to return the economy to its pre-recession level.
The week began with the stock market picking up where it left off the previous week. Each of the benchmark indexes listed here advanced in value, led by the tech-heavy Nasdaq, which jumped 1.10%, pushed higher by Amazon and Adobe. Last Monday’s run marked the seventh straight advance for the Nasdaq — its longest rally of the year. The Russell 2000 gained 1.00%, followed by the S&P 500, the Dow, and the Global Dow. Crude oil reached $40 per barrel for the first time in quite a while, the dollar dropped, and the yield on 10-year Treasuries inched higher. Stock values climbed despite the accelerating number of COVID-19 cases reported.
On April 20, 2020, the price of a futures contract for West Texas Intermediate crude — the benchmark for U.S. oil prices — fell below zero for the first time in history, dropping more than 306% in trading on the New York Mercantile Exchange and ending the day at -$37.63 per barrel.1 Essentially, this meant that investors who would soon be obligated to take possession of a barrel of oil were willing to pay someone else to take it instead.
Investors continue to move toward stocks despite unfavorable economic data. New scientific and medical developments in the battle against COVID-19 offer hope. Last Monday saw stocks rebound from losses earlier in the day to close on a high note. Surging oil prices gave a boost to energy shares, which helped drive the market higher. Each of the benchmark indexes listed here closed Monday in the black.
April began on a sour note for stocks as each of the indexes listed here lost value. Economic reports reflected the negative impact of the COVID-19 pandemic. There were more than 700,000 jobs lost in March while total claims for unemployment insurance benefits soared to nearly 18 million. A cut in production didn’t prevent crude oil prices from hitting negative numbers as demand waned and storage neared full capacity. Purchasing managers saw manufacturing hit lows not seen in more than ten years.
Markets were mixed on the week, as the large- cap U.S. market indices snapped their two-week winning streak and ended lower while the smaller- caps ended higher
Besides the ever-present COVID-19 concerns, the week was dominated by the negative price of oil, a busy corporate earnings week and stimulus3.5 from the federal government
The DJIA dropped 1.9% on the week, followed closely behind by the S&P 500’s 1.3% loss, NASDAQ’s small 0.2% decline and the smaller- cap Russell 2000’s 0.3% gain
On Monday, the price of a barrel of WTI crude to be delivered in May settled at -$37.60 per barrel, the first time in history that it has closed in negative territory
As the week progressed, WTI crude futures rallied, with the June WTI contract ultimately ending the week north of $17/barrel
Despite the extreme volatility in oil, the Energy sector was the only S&P 500 sector to see gains, as it jumped 1.7% on the week
The Real Estate (-4.4%) and Utilities (-3.8%) sectors fared the worst on the week
Weekly initial claims for the week ending April 18 decreased by 810,000 to 4.4 million
Last week did not start off well in the market. However, stocks rebounded on Friday, recouping much of the value lost earlier in the week. Nevertheless, stocks ended last week relatively flat.
In the final quarter of 2018, interest rate and growth fears, along with geopolitical events, sparked volatility in the financial markets and reversed many of the outsize stock gains notched earlier in the year.