Market developments and recovery progress for April 6

A perspective from E*TRADE Capital Management, LLC 04/06/20

The latest market and economic developments:

  • Despite last week’s dismal jobless claims and employment report, it was the quietest week for the market in more than a month. The S&P 500® finished the week down 2.1%, while the Dow Jones Industrial Average lost 2.7%—the third down week of the past four.
  • Stocks rebounded in early trading Monday as slowing death rates in Europe provided hope that social distancing measures are beginning to make a positive impact.
  • The emergency meeting scheduled for today between the Organization of the Petroleum Exporting Countries (OPEC) and other top oil-producing nations was postponed after tensions escalated between Saudi Arabia and Russia and US producers failed to signal their willingness for production cuts of their own.1

And here are the most recent updates on our path towards recovery:

  • Over the weekend, New York City saw its first drop in daily coronavirus-related deaths. While cautioning it’s still too early to signal a trend, Governor Andrew Cuomo said the data may indicate the virus is plateauing.2
  • There are glimmers of hope in Europe that the virus may be easing. Spain’s daily death toll declined for the fourth-straight day after peaking on April 2.3 Italy and France also reported a decline in deaths. Austria has outlined an easing timeline for its national lockdown after three consecutive days of more recoveries than new positive tests.4
  • Wuhan, China—the original epicenter of the coronavirus outbreak—will reopen on Wednesday, April 8. Public transportation will resume, and residents will be allowed to enter and leave the city for the first time since January.5

Some food for thought:

On Monday the markets awoke to news that several European countries had reported declines in coronavirus deaths. While President Trump and health officials have cautioned the US still has difficult days ahead, signs of progress around the globe are a welcome reminder that, eventually, there is a light at the end of the tunnel.

That’s not to say there won’t be more volatility to come as the focus shifts from “flattening the curve” to emerging from the depths of a global lockdown. The market has worked through the initial shock of the sell-off faster than previous crises, and with signs that the pandemic may be slowing soon, businesses, lawmakers, and investors will begin to focus on how the economic recovery takes shape.

Bottom line: Investors should brace themselves for the road ahead as the lockdown shows its true colors in economic data and corporate earnings. Stay the course and keep investing decisions focused on individual timelines, goals, and risk tolerance.

  1. The Wall Street Journal, “Saudi-Russia War of Words Delays Oil-Truce Talks,” 4/4/20, https://www.wsj.com/articles/saudi-russia-war-of-words-delays-oil-truce-talks-11586001480
  2. New York Times, “Daily Death Toll in N.Y. Sees a One-Day Drop, Cuomo Says,” 4/5/20, https://www.nytimes.com/2020/04/05/nyregion/coronavirus-new-york-update.html?action=click&module=Spotlight&pgtype=Homepage
  3. CNBC, “Coronavirus live updates,” 4/5/20, https://www.cnbc.com/2020/04/06/coronavirus-latest-updates.html
  4. Bloomberg, “Spain’s New Virus Infections Fall as Austria Eases Lockdown,” 4/6/20, https://www.bloomberg.com/news/articles/2020-04-06/german-coronavirus-cases-exceeds-100-000-as-deaths-increase
  5. Bloomberg, “China to Lift Lockdown Over Virus Epicenter Wuhan on April 8,” 3/24/20, https://www.bloomberg.com/news/articles/2020-03-24/china-to-lift-lockdown-over-virus-epicenter-wuhan-on-april-8

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