June 3, 2020

Good morning,

The U.S. stock market is off to a strong start in June, adding another solid day of gains yesterday in all three major stock indices.  For the day, the Dow gained 267.43 points, or 1.05%, 23 points on the Dow coming from Home Depot alone.  The S&P 500 was up for the sixth day of the last seven, gaining 25.09 points, or 0.82%.  The tech-heavy NASDAQ ended the day up 56.33 points, or 0.59%, while spending much of Tuesday in the red.  Of interest to note, the NASDAQ Composite begins today’s trading less than 1% from its February 19 record high.

The ADP Employment Report released this morning added more fuel to this recent rally, showing 2.76 million private sector jobs were lost in May, when analysts had expected losses of 9 million jobs.  On the news, Dow futures jumped to over 200, and maintained (and extended) those gains into this morning as trading began.

So let’s look at the landscape of the market for 2020.  It went from all-time highs on February 19 to reaching -30% (or very near) for the Dow, S&P 500 and NASDAQ by March 23.  By any measure, that was a decline of historic proportions.  The market bounced off the March 23 low to post solid gains in April and May, and is off and running in the first three trading sessions in June - all powered by positive economic news.

Will the market fully recover?  Yes, at some point.  As noted above, the NASDAQ may be a stone’s throw away from reaching its February 19 high.  But we expect that the road to full market recovery may well get bumpy along the way.  Why do we believe that?  It is the unknown economic and financial news coming over the next few months, reflecting the full impact of the coronavirus lockdown.  It is the concern about eradicating the coronavirus, and the development of an effective vaccine to stop its spread.  It is also about a nation reeling over the death of George Floyd, and the social and racial unrest that is happening today.

We are confident the investment markets will recover, we pray our nation will too.