What’s wrong with the market? Here is your weekly round-up

Market Review – Week Ending April 10, 2020

What did the market indices do?

index week Week over Year to date
Dow Jones industry average + 12.7% 23,719.40 -16.3%
NASDAQ Composite Index + 10.6% 8,153.60 -8.9%
S&P 500 index + 12.1% 2,789.80 -13.2%

The market is recovering

The stock market posted a general decline the week before, but stocks came back sharply this week. We saw that all major indices closed the week in double digits for the second time in three weeks. The Dow closed the week up 12.7%, the NASDAQ up 10.6% and the S&P 500 up 12.1%. The S&P 500’s return of more than 12% was the index’s best weekly return since 1974.

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Do we see a comeback?

Yes, it is true that the markets still have a long way to go before fully recovering from the COVID-19 crisis. However, we are starting to see the major indices slowly rising again. Since the start of the year (as I showed above) the indices are still knocking down, but by the close of trading on Thursday April 9th, the S&P 500 index rose nearly 25% from a low in March 23rd. Still, it was still a shadow below 18% lower than the record this index set a month ago. So there is still a lot to be done, but this is positive news.

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Small cap stocks rose

Small-cap stocks (a company with a market cap between $ 300 billion and $ 2 billion) saw significant gains this week. They outperformed their large-cap siblings many times over. For example, the Russell 2000, which tracks small cap stocks, rose nearly 19% over the week. And since mid-March, the Russell 2000 has increased around 26%. This means positive news again as smaller businesses make incredible profits.

Unemployment continues to rise

We continued to see an increase in unemployment claims this week. This week alone, US workers have filed a total of 6.6 million applications. In addition, the past two weeks also had more than 10 million claims. If you recall, at the end of March a new record of 7.5 million citizens signaled unemployment benefits.

The Fed stepped in again

The US Federal Reserve has made $ 2.3 trillion available to small and medium-sized businesses alike. They have extended these benefits to state, city, and regional agencies as well. This was yet another game for the Fed to bolster an otherwise unstable economic situation. In addition, the Federal Reserve will expand its corporate loan programs to include, for example, high risk debt (not originally part of an earlier initiative).

Consumers lost confidence – big time

The consumer sentiment poll that – you guessed it, consumer sentiment – took a nosedive and hit its lowest level in 9 years. Initial results show that the index fell by about 25%, which is the biggest drop from one month to the next. This is obviously a cause for concern as the consumer sentiment survey is a key indicator of how consumers feel about the economy, money and more.

We will continue to cover the markets and give you the rundown of the big events of the week. Look out for our next market review on April 20th.

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