The Week on Wall Street
Despite a historic downturn in employment, stocks managed to climb higher last week as investors were emboldened by the pace of economic re-openings, both here and abroad.
The Dow Jones Industrial Average gained 2.56%, while the Standard & Poor’s 500 advanced 3.50%. The Nasdaq Composite Index jumped 6.00% for the week. The MSCI EAFE Index, which tracks developed overseas stock markets, slipped 1.09%.[1][2][3]
Tech Stocks Power NASDAQ
Last week’s trading was driven by a crosscurrent of emotions – worries about weak corporate earnings pace of business re-openings as well as optimism over the pickup in economic activity and progress on developing a vaccine.
Stocks posted back-to-back daily gains to end the week despite troubling employment data. Perhaps the headline of the week was that the technology-heavy NASDAQ Composite Index moved into positive territory year-to-date.[4][5]
A “Silver Lining” in the Jobs Report?
Last week brought into stark focus the number of jobs lost since the start of the economic shutdown. Since mid-March, unemployment insurance claims have reached 33.5 million. The pace of newly unemployed has slowed down, however, with recent weeks at about half the rate at the peak in late March.[6][7]
April’s employment report, released on Friday, saw a spike to 14.7% in the unemployment rate. As severe as these numbers may be, 88% of April’s newly unemployed characterized their job loss as temporary rather than permanent, as opposed to 47% of the newly unemployed in March who said their job loss was temporary.[8][9]
[1] The Wall Street Journal, May 8, 2020
[2] The Wall Street Journal, May 8, 2020
[3] The Wall Street Journal, May 8, 2020
[4] The Wall Street Journal, May 8, 2020
[5] The Wall Street Journal, May 8, 2020
[6] CNBC, May 6, 2020
[7] CNBC, May 6, 2020
[8] The Wall Street Journal, May 8, 2020
[9] The Wall Street Journal, May 8, 2020
