June 8, 2020

Good Monday morning,

Capped off with an unexpectantly good unemployment report released Friday, as well as a better-than-expected manufacturing report Thursday, the U.S. equity markets posted another winning performance last week.  In what appears to be a turning point for the economy, the equity markets – which are a leading indicator of economic activity – continued the rally that began in April.  The Dow Jones Industrial Average jumped 829.18 points, or 3.15%, while the S&P 500 and NASDAQ gained 81.58 and 198.27 points, or 2.62% and 2.06%, respectively.

For the week, the Dow finished 6.8% higher, while the S&P 500 and NASDAQ gained 4.9% and 3.3%, respectively.

Over the weekend, Allianz Chief Economic Adviser, Mohamed El-Erian, in speaking of Friday’s jobs report said, “I was very surprised.  This will go down in history as the biggest positive data shock for the markets and the economy.”

In the few minutes remaining before the New York Stock Exchange opens this morning, Dow futures are up about 250 points.  This may indicate that the market anticipates more positive economic news as more states begin to reopen their economies or at least loosen restrictions on activity.

Moving higher today are some of the stocks hit hardest by the COVID pandemic, namely transportation, retail and cruise line companies.  The NASDAQ, which reached an intra-day high last Friday, closed to within 4 points of that high.  Over the last several weeks, “big tech” has lost some stream, giving way to others – financials, for example – who have not fared as well through the pandemic.