Week In Review
Market highlights: Week ending 5th June 2020
MARKET SUMMARY
A positive May jobs report and faster-than-expected re-openings ensure that the stock market comeback continued this week with the S&P 500 up 5.0%. May’s jobs report in the U.S. showed 2.5 million jobs were added over the month following the 20+million job losses in March and April. The Dow rose 7% this week as previously out of favour value stocks continued their recent run of good form.
EQUITIES
Equity markets were in the green for a third consecutive week with value-orientated winners at the forefront of this most recent run.
BOND YIELDS
Treasury prices fell this week, sending yields higher. A Better-than-expected jobs report and widespread re-openings stripped away some of the markets risk-off sentiment.
CURRENCIES
The Euro comeback continued as the European Central Bank increases its economic stimulus package.
COMMODITIES
Crude Oil prices rose to almost $40 a barrel, over double their recent April lows. Increasing demand as economies re-open, coupled with the extension of OPEC output cuts, ensured the oil recovery continued.
SECTOR BREAKDOWN
MARKET OUTLOOK
With everything that has happened this year, it’s hard to comprehend that the S&P 500 is now just 6% below it’s all-time high and essentially flat for 2020, down just 0.3% YTD. With unemployment still over 13% in the U.S. and global coronavirus cases continuing to grow, uncertainty remains, but market participants persist with their fiscal and monetary support narrative as governments continue to subsidise the economic machine.
Widespread civil unrest in the U.S. has added another layer of uncertainty to markets. The harsh reality is, the Stock Market takes no moral position here; there are no obvious public companies to sell as a result of social unrest. While this is a crucial movement for individuals, it is far less vital to the market, so Wall Street can continue to party with the FED’s money while Main Street burns. A truly unsettling dislocation.
