Stocks Stage Comeback…..

U.S. equities staged a comeback to finish in the green, after continued uneasiness regarding a potential second wave of COVID-19 cases amid a number of global economies reopening pressured stocks early on. The moves higher came despite yesterday’s cautious commentary from Fed Chairman Powell, and as Congress is haggling over the House’s proposed additional $3 trillion in fiscal relief. Treasury yields were lower, as bond prices gained ground, and gold moved higher. The U.S. dollar saw a modest rise and crude oil prices jumped. In equity news, Dow member Cisco Systems increased following its earnings report, Mastercard was up after offering a relatively positive outlook, and Norwegian Cruise Line traded higher despite posting a larger-than-expected loss. However, Dow component 3M was lower after providing an update on April sales. On the economic front, weekly initial jobless claims remain elevated and import priced dropped. Europe and Asia saw widespread losses.

The Dow Jones Industrial Average rallied 377 points (1.6%) to 23,625, the S&P 500 Index advanced 33 points (1.2%) to 2,853, and the Nasdaq Composite increased 81 points (0.9%) to 8,944. In heavy volume, 1.1 billion shares were traded on the NYSE and 3.9 billion shares changed hands on the NASDAQ. WTI crude oil jumped $2.20 to $27.88 per barrel and wholesale gasoline was $0.06 higher at $0.91 per gallon. Elsewhere, the Bloomberg gold spot price rallied $16.15 to $1,732.43 per ounce, while the Dollar Index—a comparison of the U.S. dollar to six major world currencies—gained 0.1% to 100.32.

Weekly initial jobless claims came in at 2,981,000 for the week ended May 9th, above the Bloomberg estimate of 2,500,000, and compared to the prior week’s upwardly-revised 3,176,000 level. The four-week moving average declined by 564,000 to 3,616,500, while continuing claims increased by 456,000 to 22,833,000, south of estimates of 25,120,000. The four-week moving average of continuing claims for the week ended May 2nd rose by 2,729,750 to 19,760,000.

The Import Price Index declined 2.6% month-over-month (m/m) for April, compared to expectations of a 3.2% fall, and following March’s downwardly-revised 2.4% decline. Compared to last year, prices were down 6.8%, compared to forecasts of a 7.4% fall and versus March’s negatively-revised 4.2% decrease.

Treasuries were higher following the data, as the yield on the 2-year note dipped 1 basis point (bp) to 0.15%, the yield on the 10-year note declined 2 bps to 0.63%, and the 30-year bond rate fell 5 bps to 1.30%.

©2020 Charles Schwab & Co., Inc., Member SIPC. All rights reserved.

Schwab Center for Financial Research (“SCFR”) is a division of Charles Schwab & Co., Inc. The information contained herein is obtained from third-party sources and believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. The investment information mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinions are subject to change without notice in reaction to shifting market conditions.