The Markets (as of market close May 22, 2020)
The major benchmarks opened the week on a high note, led by the Russell 2000, which gained more than 6.0%. The large caps of the Dow (3.85%) and S&P 500 (3.15%) posted notable gains, as did the Global Dow (3.67%). The tech-heavy Nasdaq climbed nearly 2.5%. Investors were buoyed by positive COVID-19 news. Data showed new cases of the virus were growing at the slowest rate in months. Monday morning, biotech company Moderna reported encouraging results from human testing of a vaccine. This followed Sunday night's remarks from Federal Reserve Chair Jerome Powell that more monetary stimulus may be on the way.
Stocks couldn't keep up with the pace set on Monday, as gains were relinquished by the close of trading Tuesday. Investors seemed to ride the wave of information on a possible COVID-19 vaccine from Moderna. While Monday's report was upbeat, another article on Tuesday questioned the sufficiency of the study's data. Crude oil prices continued to rise, reaching $32.36 by late Tuesday afternoon.
Wednesday saw stocks rebound, led by the small caps of the Russell 2000, which jumped 3.0%, followed by the tech-heavy Nasdaq, and the large caps of the S&P 500 and the Dow. Once again, investors got encouraging news about a vaccine from another biotech firm. As more states relaxed restrictions, investors gleaned hope of an economic restart. Finally, oil prices rose for the fifth consecutive day. Many consumers are noticing higher gas prices at the pumps just in time for Memorial Day and the unofficial start of summer.
Thursday saw stocks dip on news of an additional 2.4 million claims for unemployment insurance last week, pushing the total number of claimants past 25 million. Adding to investor angst is rising trade tension between the United States and China. Energy, tech, and utilities sectors took hits, and gold prices fell while crude oil climbed for the sixth straight trading day. Of the benchmarks listed here, only the Russell 2000 grew, while the remaining indexes ended the day in the red.
Friday was a mixed bag of information and returns in the market. The Dow and Global Dow each fell less than a point while the S&P 500, the Nasdaq, and the Russell 2000 each ticked up less than a point. Trouble between Hong Kong and Beijing sparked protests and drove Asian securities lower, adding to the tensions between the United States and China. On the other hand, states continued to gradually relax stay-at-home orders. The price of crude oil fell for the first time in several days yet closed the week ahead.
Overall, the benchmark indexes listed here posted solid weekly returns, led by the small caps of the Russell 2000, which climbed nearly 8.0%. The remaining indexes ended the week with gains of over 3.0%, respectively. Long-term bond yields remained about the same as bond prices were relatively stable.
Crude oil prices continue to climb, closing last week at $33.33 per barrel by late Friday afternoon, up from the prior week's price of $29.71. The price of gold (COMEX) dipped last week, closing at $1,734.00 by late Friday afternoon, down from the prior week's price of $1,752.50. The national average retail regular gasoline price was $1.878 per gallon on May 18, 2020, $0.027 higher than the prior week's price but $0.974 less than a year ago.
The Markets (as of market close May 15, 2020)
Stocks opened the week with mixed returns. The S&P 500 stayed level, the Dow fell by almost half a point, and the Nasdaq finished the day up three-quarters of a percent. Crude oil prices dropped by nearly one percent. Positive news came from New York last Monday as Governor Cuomo indicated some businesses would be able to reopen on a regional basis, as the state reported the lowest number of COVID-19-related deaths since March.
The major indexes tumbled last Tuesday, halting a multiday win streak for the Nasdaq. The Dow lost over 450 points, or 1.89%, its largest one-day percentage drop since May 1. Both the S&P 500 and the Nasdaq fell more than 2.0%. Grim news on the COVID-19 front seems to have driven the market. Several countries that had begun to ease restrictions saw a spike in new virus cases reported. Wuhan, the Chinese city that reported the first cases of COVID-19, had people test positive for the first time in more than a month. Finally, Dr. Anthony Fauci, head of the U.S. National Institute of Allergy and Infectious Diseases, in testimony before the Senate, warned that reopening the nation too soon and without caution and expanded testing could lead to "needless suffering and death."
Stocks were sent reeling last Wednesday following Federal Reserve Chair Jerome Powell's warning against the likelihood of a rapid economic recovery. Powell also suggested that Congress enact further economic stimulus to ease the risk of long-lasting economic damage as the country tries to recover from the pandemic. Each of the major benchmark indexes listed here plunged deeper into the red by the end of the day's trading. The Russell 2000 dropped 3.3%, and the Dow slid close to 2.2%. The Nasdaq, which had surpassed its year-end value following a series of daily gains, fell back into negative territory for the year.
Thursday saw nearly 3 million new claims for unemployment insurance, bringing the total of those receiving unemployment insurance benefits to almost 23 million. Despite that report, investors returned to the market, pushing the major indexes higher. The Dow gained over 377 points, or 1.63%, the S&P 500 pushed ahead by 1.15%, and the Nasdaq rose by nearly 1.0%. Stocks of some major banks surged Thursday, driving the large-cap benchmarks.
Stocks closed Friday higher, but not enough to recover from midweek losses, ultimately ending last week's trading on the downside. Last Friday was full of conflicting information for investors to digest. Retail sales posted historic losses, the trade war with China was rekindled, and the House of Representatives was set to vote on an additional $3 trillion COVID-19 relief package. By the close of trading last Friday, each of the benchmark indexes listed here lost value, led by the small-cap Russell 2000, which dropped nearly 5.5%. The Global Dow fell by more than 3.3%, followed by the large caps of the Dow and the S&P 500. The Nasdaq ended the week down a little more than 1.0%, but not enough to pull it below its year-end value. The other major indexes remain well below their 2019 closing marks, however.
With production curtailed, crude oil prices are steadily rising. Prices closed last week at $29.71 per barrel by late Friday afternoon, up from the prior week's price of $24.81. The price of gold (COMEX) continued to climb last week, closing at $1,752.50 by late Friday afternoon, up from the prior week's price of $1,708.00. The national average retail regular gasoline price was $1.851 per gallon on May 11, 2020, $0.062 higher than the prior week's price but $1.015 less than a year ago.
Federal, state, and local governments have extended a number of deadlines amid the coronavirus pandemic. Here are just a few of the deadlines that have been affected.
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.
This unprecedented price collapse was for contracts scheduled to expire the following day and require delivery in May. June futures dropped 18% to about $20 a barrel, and the May contract clawed its way back to about $10 on April 21.2-3 But the dramatic plunge below zero highlighted a fundamental problem for the oil industry in the face of evaporating demand due to COVID-19. There is too much oil, and the industry is running out of places to put it.