Market Recap for Week Starting 4/13/2020

Market Recap for Week Starting 4/13/2020

 

This week has seen continued volatility in the stock market, but the major averages are all higher at the time of writing.

 

Linden Thomas | Market Recap 4-13-2020

Investors continued a flight to companies with quality balance sheets as well as those positioned to take advantage of “contactless” culture. This has driven outperformance in the NASDAQ and tech companies in general. Energy stocks have also rallied on the back of the recently struck OPEC+ deal which will sooth fear around an oil price war between Saudi Arabia and Russia. Lastly, President Trump announced on Thursday his proposed guidelines for reopening sections of the economy in May, which has helped bolster stocks on Friday.

 

Interest rates fell through the week from a Monday 10-year Treasury yield of 0.751% to 0.606% intraday on Friday. The short-end rates also fell with 3-month bills hitting 0.100%. On the mortgage front, 30-year fixed mortgage rates fell slightly from 3.33% to 3.31%, but 15-year rates slightly rose from 2.77% to 2.80% according to Freddie Mac statistics.

Thursday’s initial unemployment claims came in at a seasonally adjusted 5.2 million, a drop of 1.37 million from one week ago. The Department of Labor is estimating the unemployment rate to be 8.2% as of the week ending April 4, 2020.

 

Things to watch as we move into next week will be changes in the hospitalization rates for COVID-19 patients primarily. The pandemic has been the major driver of markets in recent weeks and will likely continue to be so in May. Additionally, discussions of further fiscal support packages for small businesses and individuals are in negotiations and could move markets as things develop on that front.

 

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