Stocks finished the second quarter and started the third on a strong note. Thursday’s jobs report showed a record 4.8 million jobs added in June. The number was well ahead of most projections, but enthusiasm heading into the weekend was tempered by the highest single day infection count, the first over 50,000.
Weekly Returns
S&P 500: 3,130 (+4.0%)
FTSE All-World ex-US (VEU): (+2.6%)
US 10 Year Treasury Yield: 0.67% (+0.03)
Gold: $1,776 (+0.3%)
EUR/USD: $1.124 (+0.2%)
Major Events
- Monday – Pending home sales rose 44% in May from April, showing resiliency in housing in the pandemic, but remain below volumes from a year ago.
- Tuesday – The EU said it will keep borders closed to U.S. travelers.
- Wednesday – Apple said it will reclose 30 retail stores amid coronavirus increases.
- Wednesday – Two U.S. automakers reported new vehicle sales declined by a third in Q2.
- Thursday – A record jobs gain of 4.8 million lowered unemployment rate to 11.1%.
- Thursday – U.S. virus cases had the biggest increase since May 9.
- Thursday – White House Economic Advisor Larry Kudlow said the administration is unhappy with China and suggested there may be “export restrictions.”
Our Take
The economy came to a screeching halt toward the end of March, yet stocks rallied back in the second quarter as reopening measures were introduced. Job loss started to reverse, picking up steam this month, and the hope for a V shape recovery began to rise. The third quarter starts with momentum but also trepidation as virus counts explode in Florida, California, Texas and other states.
We continue to learn frustratingly slowly about COVID-19. There will continue to be tradeoffs between trying to keep people safe and trying to keep the economy running. Headed into the holiday weekend, there appears to be little collective or political will to move back to more restrictive shelter in place rules, but that may change quickly as more people succumb to the virus and its impact is felt more personally by additional people.
It does seem clear that when people are able to venture out, there is great spirit to work, to play, and to spend. Hopefully the “return to normal” will happen sooner than later. Either way, there is reason for optimism that the economy is spring loaded. All of us at Personal Capital wish you a safe, fun, and responsible Fourth of July weekend.
