After a rough finish last Friday, stocks headed upward this week. On Monday, it was announced that the index of pending home sales was up a record 44.3% in May. Paired with the strong new home sales numbers from the week before, it appears home buyers are reentering the housing market – a good sign for the economy at large.
Adding to investor optimism is some encouraging study data on a coronavirus vaccine. While the results of the study are still very much preliminary, the market’s positive reaction shows it believes a viable and deployable vaccine will augur the end of the pandemic and its economic downturn.
News on the hiring front was also generally positive this week. The May jobs numbers were revised higher, showing more than three million jobs were added in the month. June’s numbers did not meet consensus expectations, but they were still in solidly positive territory, with payrolls rising by 2.369 million. A notable recovery was seen in jobs tied to leisure and hospitality, the areas initially hit the hardest by shelter-in-place orders.
However, in spite of all the good news, the number of new COVID-19 cases is up 80% nationwide in the past two weeks. In response, a number of state and local governments have begun to slow reopenings and mandate wearing masks. For many restaurants and small businesses this is a frustrating development, as a resurgence of cases may force many businesses to close again after recently reopening.
This week we also saw the second quarter come to a close. From a stock market perspective, equities fared well having their best quarter since the technology boom of the late 1990s. Time will tell if the market moved too far too fast, but for now, it feels like the markets are heading in the right direction.
Stay safe and be well.
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Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance. Investing involves risk and the potential to lose principal.
(06/20)