Returns in the Markets for the week ending 04/20/2020

Returns in the Markets for the week ending 04/20/2020 were as follows:

US Major Market Indexes (The first number is each category is the 1-week performance. The second number is the year-to-date performance)

Dow Jones 30 Industrial Average (-1.93%. -16.69%). S&P 500 (-1.32%, -12.20%). NASDAQ Index (-0.18%, -3.77%). US Small-Cap Index (+0.74%, -25.79%). CBOE Volatility Index, or Fear Gage, (-5.82%, +160.74%).

US Sector ETFs

XLC Communication Services (+0.52%, -9.01%). XLY Consumer Discretionary (-0.60%, -10.07%). XLP Consumer Staples (-2.96%, -6.23%). XLE Energy (+1.97%, -40.95%). XLF Financial (-2.90%, -28.73%). XLV Health Care (-0.49%, -1.04%). XLI Industrials (-2.42%, -23.81%). XLB Materials (-.80%, -18.25%). XLRE Real Estate (-4.23%, -13.78%). XLK Technology (-0.71%, -2.81%).XLU Utilities (-3.65%, -8.80%).

Global Market ETFs

ACWI all-country World index (-1.34%, -15.58%). ACWX all-country World index ex US (-1.01%, -20.58%). AAXJ all-country Asia ex Japan (-1.34%, -15.58%). EWJ Japan (+0.14%, -14.10%). EZU Eurozone (-1.77%, -25.69%). ILF Latin America 40 Index (-10.61%, -49.66%). EEM Emerging Markets (-16.97%, -61.04%).

Commodities ETFs

DBC Commodity Tracking Index (-6.47%, -32.92%). DBA Commodities Agriculture (-2.42%, -19.57%). USO United States Oil (-38.95%, -79.94%). DBB Base Metals (-1.81%, -16.67%). IAU Gold (+2.61% +13.79%). BDRY Dry Bulk Shipping (-16.97%, -59.61%).

Bond Market

In the bond market, the 10-year US Treasury interest rate went from 0.642 on April 17, to 0.605 on April 24.

Currencies

In currencies, the US Dollar DXY Index went from 99.836 on April 17 to 100.434 on April 24.

Other Significant Events

Wall Street Extends Gains in Friday Afternoon Trading

US stocks turned positive on Friday afternoon, helped by a rally in oil prices after a historic collapse on Monday. Still, Wall Street was on track to end a tumultuous week lower, amid concerns about an economic recovery as some states prepared to relax the coronavirus-induced lockdowns. Earlier, market sentiment was hit by reports that a trial of Gilead Sciences antiviral drug remdesivir to combat Covid-19 was not successful, while the Trump administration said it might extend its national social distancing guidelines until the summer. 

The Dow turned higher on Friday, led by tech as investors weighed up further evidence of weakness in the economy against the backdrop of fresh economic stimulus measures.

The Dow Jones Industrial Average was up 0.60%, the S&P 500 rose 0.84%, while the Nasdaq Composite gained 1.03%.

In a further sign the economic downturn is likely to be severe, U.S. durable goods orders fell by 14.4% last month, the biggest slide since 2014, led by waning demand for big-ticket items such as cars and slump in orders for passenger planes.

The weaker-than-expected data came just as President Donald Trump signed the $484 billion coronavirus stimulus package into law to ease the Covid-19 hit to the economy at a time when some states are set to reopen.

Energy stocks, meanwhile, moved off session lows to trade 1% higher even as oil prices lost some gains into settlement.

Week Ahead

The US earnings season continues next week, with companies such as Alphabet, Microsoft, Apple, Amazon and Facebook reporting their first-quarter results and updating guidance on full-year expectations amid the coronavirus pandemic. Meanwhile, central bank policy meetings in the US, Eurozone and Japan will be keenly watched as well as GDP data for the US and Eurozone and PMI survey for China. Other key economic data include US personal income and outlays, ISM Manufacturing PMI and construction spending; Eurozone business survey and inflation; Japan consumer confidence and industrial output; and Australia inflation data.

In the US, Federal Reserve policymakers are seen holding interest rates at current levels when they meet on Wednesday, with all eyes on Fed Chair Jerome Powell's press conference and the latest FOMC economic projections for further details about future policy steps. In March, officials lowered the target range for its federal funds rate by 150bps to 0-0.25 percent and launched a massive quantitative easing program in an attempt to support the economy amid the coronavirus outbreak. Meanwhile, the Bureau of Economic Analysis' GDP figures will probably show the US economy contracted 4 percent during the first quarter, amid efforts to contain the rapid spread of the pandemic. Other notable publications include: personal income and outlays; PCE price index; ISM Manufacturing PMI; construction spending; first-quarter employment cost index; CB consumer confidence; pending home sales; Case-Shiller home prices; Dallas Fed Manufacturing Index; Chicago PMI; and the advance estimates of goods trade balance and wholesale inventories.

Elsewhere in America, important data to follow include Canada monthly GDP and Markit Manufacturing PMI; Mexico first-quarter GDP, unemployment and trade balance; and Brazil jobless rate.

US Jobless Claims Hit 26 Million in 5 Weeks

The number of Americans filling for unemployment benefits was 4.427 million last week, bringing the total reported over the past five weeks to over 26 million, equivalent to 16% of the labor force. 

US Consumer Sentiment Revised Higher

The University of Michigan's consumer sentiment for the US was revised higher to 71.8 in April of 2020 from a preliminary of 71. Still, it remains the lowest reading since December of 2011. 

US Durable Goods Orders Fall the Most since 2014

New orders for US manufactured durable goods plunged 14.4 percent month-over-month in March of 2020, following a downwardly revised 1.1 percent gain in February and worse than market forecasts of a 11.9 percent drop. It is the biggest drop in durable goods orders since August of 2014.

US New Home Sales Lowest in Near 1 Year

Sales of new single-family homes in the United States plunged 15.4 percent from the previous month to a seasonally adjusted annual rate of 627 thousand in March of 2020, below a downwardly revised 741 thousand in February. It is the lowest reading since May of 2019 and the biggest drop since July of 2013.

US Composite PMI Slumps to Record Low

The IHS Markit US Composite PMI slumped to 27.4 in April 2020 from 40.9 in the previous month, a preliminary estimate showed, signaling the steepest reduction in private sector output since the series began in late-2009.

US Factory Activity Shrinks the Most in 11 Years

The IHS Markit US Manufacturing PMI fell to 36.9 in April of 2020 from 48.5 in March, below market expectations of 38. The reading pointed to the sharpest contraction in factory activity in 11 years.

US Service Sector Contracts at Record Pace

The IHS Markit US Services PMI fell to 27.0 in April 2020 from the previous month's 39.8, below market expectations of 31.5, a preliminary estimate showed. The latest reading pointed to the steepest fall in service sector activity since the series began in October 2009.

Thank you and please stay tuned for more upcoming reports.

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Len Martinez is a Financial Consultant. Information in the "Bull Valley Advisor” newsletter should not be considered as investment advice or an offer to buy or sell securities. Data is derived from sources considered to be reliable including Morningstar, StockCharts.com, YAHOO Finance, FINVIZ, TipRanks, Investing.com, ECRI, OCED, gurufocus, Crestmont Research, Trading Economics and S2O. Results are not guaranteed. Len Martinez is not an RIA. The data is shown for informational purposes and should not be considered investment advice or an offer to buy or sell securities.