May 29, 2020

Happy Friday,

Yesterday has another nice day in the U.S. equity markets, that is until the announcement of the President’s news conference to be held today regarding the renewed tensions with China.  Gains quickly evaporated, ending the day slightly negative.  The Dow lost 147.63 points, or -0.58%.  The S&P 500 and NASDAQ followed the Dow, dropping 6.40 and 43.37 points, -0.21 and -0.46%, respectively.  This was the first day when the economy and coronavirus did not largely dominate the day’s news.

Rising U.S.-China tensions are again making investors a bit nervous today, with the market opening down about 150 points.  Notwithstanding today’s opening, May is the second straight month of solid gains in the U.S. equity markets.  Hitting the apparent market low on March 23, the domestic stock markets have created somewhat of a V-shaped recovery – although the recovery has, so far, not been nearly as steep as the decline that began in February.

Reports released today show a sharp rise in consumer income.  However, the report on personal spending was also released and indicated a sharp decline.  What does this add up to?  This likely is indicating that the stimulus checks and other coronavirus relief funds are not being spent, and instead being saved.  The intent of the relief funds was to provide liquidity to the public that would be spent in an effort to bolster the economy.

This is likely to be a news-filled weekend on many fronts.  We look forward to discussing how any events may affect the investment markets going forward.

Have a great weekend.