Weekly Market Review: June 8, 2020

Weekly Market Review: June 8, 2020


The S&P 500 achieved its all-time closing high (3386) on 2/19/20, then fell 33.8% (total return) before bottoming on 3/23/20 (at 2237), and now has nearly retraced its steps by gaining +43.4% (total return) as of the close of trading last week (6/05/20). At 3194, the S&P 500 has to gain just +6% to get back to its all-time closing high. It’s likely that optimism for stocks has been fueled by a belief/hope that the reopening of the U.S. economy will lead to a quick bounce-back of U.S. businesses and of American consumer spending (source: BTN Research).

All the bright folks who get paid to forecast economic results got it wrong – big time. The consensus prediction had the U.S. reporting 7.5 million job losses in May 2020. Instead, U.S. employers reported 2.5 million job gains. The government attempts each month to report how many Americans are jobless out of our national workforce of 158 million people. It does so by extrapolating the data collected from 95,000 Americans. It’s at best an inexact science. One unintended consequence of the surprise number: a third stimulus package may be put on hold by Congress, awaiting further economic data {source: Department of Labor).
Oil ministers from Saudi Arabia, Russia and the other OPEC+ countries met over the weekend to evaluate the nearly 10 million barrels per day production cut implemented by the group in May 2020. The supply cuts have worked -from its 4/30/20 closing price of just $18.84 a barrel, the U.S. oil benchmark (West Texas lntermediate1 ) has leaped to $39.55 a barrel as of last Friday’s close (6/05/20), a+ 110% price gain in just five weeks {source: NYMEX).

Notable Numbers for the Week:

  1. NOT BUYING IT – 39% of investors surveyed as of last Thursday 6/04/20 are “bearish” on U.S. stocks for the upcoming six months {source: American Association of Individual Investors).
  2. HIGHEST EVER – As of the end of April 2020, 43 U.S. states reported their highest unemployment rate in history. U.S. states have measured monthly jobless rates since January 1976 (source: Department of Labor).
  3. GETTING SMALLER – The median size of 903,000 new single-family homes completed in America during 2019 was 2,301 square feet. A decade earlier, the median size of 520,000 new single-family homes completed during 2009 was 2,417 square feet (source: Census Bureau).
  4. HARD HIT – Just two states – New York and New Jersey- account for 35% of the nation’s COVID-19 deaths as of last Friday morning 6/05/20 at noon ET (source: CovidTracking.com).