The Week on Wall Street
The stock market staged a broad rally this week, buoyed
by the prospect that COVID-19's grip on the nation may be easing and news of another Federal Reserve
program to help stabilize businesses.
The Dow Jones Industrial Average jumped 12.67%, while
the Standard & Poor's 500 climbed 12.10%. The Nasdaq Composite Index rose 10.59% for the week. The
MSCI EAFE Index, which tracks developed overseas stock markets, advanced 6.32%.[1][2][3]
A Change in Sentiment
Market sentiment took a more hopeful turn on news of an
apparent peaking of cases in Italy and New York State. Investors also welcomed comments by Dr. Anthony
Fauci that the start of a turnaround in the outbreak is close at hand.
The S&P 500
Index surged 7.03% to start the week and added to gains as the week progressed. Positive trends in
COVID-19 cases, an agreement between Russia and Saudi Arabia to cut oil production, and the Fed's
unveiling of a $2.5 trillion loan program to assist small and midsize businesses fueled the
rally.[4][5]
Credit Markets Stabilize
As the economy shut
down in March, credit markets began to exhibit deep stresses. A functional bond market is essential to
economic and financial health, which is why the Federal Reserve initiated a number of actions aimed at
helping them to operate.
Intervention by the Fed appears to have helped. A raft of new bond
offerings may be signaling that investors are now willing to take on more risk. Last week, 11
investment-grade companies sold nearly $20 billion in bonds.[6]
A stable credit
market helps the stock market, and while the bond market is not yet out of the woods, its improving
health is a positive sign.
Final Thought
One of the major challenges
for investors in the last month has been determining realistic stock valuations amid uncertainty over
corporate earnings. With earnings season about to unfold, investors may be able to better gauge the
impact of the pandemic on company profits. Investors will get to hear from corporate leaders about the
state of their businesses and possibly their outlook for the next few quarters. This may help fill in
the gap that currently exists but what remains uncertain is whether that information proves to be
positive or negative for the market.
THE WEEK AHEAD: KEY ECONOMIC
DATA
Wednesday: Retail Sales. Industrial Production.
Thursday: Housing Starts. Jobless Claims.
Friday: Index
of Leading Economic Indicators.
Source: Econoday, April 9, 2020
The
Econoday economic calendar lists upcoming U.S. economic data releases (including key economic
indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials.
The content is developed from sources believed to be providing accurate information. The forecasts
or forward-looking statements are based on assumptions and may not materialize. The forecasts also
are subject to revision.
THE WEEK AHEAD: COMPANIES REPORTING
EARNINGS
Tuesday: Johnson and Johnson (JNJ), JP Morgan Chase (JPM),
Wells Fargo (WFC)
Wednesday: Bank of America (BAC), UnitedHealth Group (UNH),
Citigroup (C), Goldman Sachs (GS)
Thursday: Blackstone Group (BX), Taiwan
Semiconductor (TSM), Abbott Laboratories (ABT)
Friday: Schlumberger (SLB),
Kansas City Southern (KSU)
Source: Zacks, April 9, 2020
Companies
mentioned are for informational purposes only. It should not be considered a solicitation for the
purchase or sale of the securities. Any investment should be consistent with your objectives, time
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The Standard & Poor's 500
(S&P 500) is an unmanaged group of securities considered to be representative of the stock
market in general.
The Dow Jones Industrial Average is a price-weighted average of 30
significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by
Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and
similar securities listed on the NASDAQ stock market and is considered a broad indicator of the
performance of stocks of technology companies and growth companies.
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was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the
performance in major international equity markets as represented by 21 major MSCI indices from
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The Wall Street Journal, April 9, 2020.
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The Wall Street Journal, April 9, 2020.
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The Wall Street Journal, April 9, 2020.
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CNBC, April 6, 2020.
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The Wall Street Journal, April 9, 2020.
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Bloomberg, April 6, 2020.