The penultimate week of May was a mixed one, but an encouraging one for oil. With crude inventories reportedly reducing, oil prices rose. There was widespread hope of an economic recovery as many states reopened. However, the disappointing jobs report and the rising US-China tensions caused some downward movement for stocks.
Monday, May 18, 2020
An experimental Covid-19 vaccine by Moderna Inc. ($MRNA) reportedly showed positive early results. This gave rise to speculation that economies could get on track quickly. That helped Treasury yields and crude oil to rise. Stocks, therefore, experienced the greatest surge in nearly six weeks as the new week began.
The S&P 500 surged 3.2% to close at 2,953.91 while the Dow rose by 908 points or 3.8% to close at 9,234.83. Nasdaq Composite rose by 2.5% and closed the day at 9,234.83.
This news particularly benefited stocks looking for normal economic activity to resume. Some of these stocks were the luxury cruise line company, Carnival Corp. They soared 15% while Live Nation Entertainment and Delta Air Lines soared by more than 13%. Real estate firms rose by nearly 5% while energy companies gained 7.5%. Moderna’s stock itself increased by a massive 25%. Crude oil prices ascended sharply. And both Brent futures and WTI Crude rose by over 7%.
Moreover, Federal Reserve Chairman Jerome Powell’s reassuring prediction on Monday, of the economy, recovering and jobs returning to the unemployed, also contributed to the positive investor sentiment.
Tuesday, May 19, 2020
After the stock surge on Monday, it was a gloomy Tuesday. Stocks fell after validity questions were asked of the allegedly positive test results of Moderna Inc ($MRNA)’s Covid-19 vaccine.
The Dow sank 391 points, 1.59%, which was the end of a winning streak that had lasted 3 days. It ended the day at 24,206.86. The S&P 500 too dropped 31 points, 1.05%, to close at 2,922.94. The Nasdaq Composite had a 50-point fall, 0.54%, and closed at 9,185.10. Moreover, crude oil rose again.
Both the S&P 500 and Nasdaq broke their 3-day winning streak. In the S&P, the Energy sector dropped 2.89% while Consumer Discretionary dropped 0.09%. Meanwhile, investors still remembered what the Federal Reserve Chairman had stressed earlier, that all possible strategies would be adopted to get the US economy back on track.
As the day’s trading reached its final hour, the Dow Jones furthered its losses while the Nasdaq Composite and S&P 500 also headed on a negative path.
Wednesday, May 20, 2020
The day started with the Dow opening 1.3% higher. The S&P 500 and Nasdaq Composite opened 1.3% and 1.4% higher, respectively. The Energy Information Administration helped aid the recovery by reporting that inventories of crude oil dropped by a significant 5 million barrels. This was the second consecutive weekly drop. In response to this, West Texas Intermediate crude oil had a $1.53, or 4.79% rise, to over $33.49 per barrel. Brent crude had a gain of $1.10 to $35.75 per barrel.
The Dow soared by over 300 points. This growth was fueled by the extended hope about a potential recovery of businesses and the economy because of some states reopening. Stocks of Facebook ($FB) and Amazon.com ($AMZN) struck all-time highs. There were also great results in the retail sector. Strong earnings were reported by Lowe’s ($LOW) and Target ($TGT). Nasdaq, dominated by tech stocks, also led the way.
Dow ended the day at 24,575.90, while the Nasdaq Composite and the S&P 500 closed at 9,375.78 and 2,971.61 respectively.
Thursday, May 21, 2020
After the gains of Wednesday, stocks fell as a result of increasing trade tension between the US and China. There were also concerns about the economy’s recovery from the Covid-19 pandemic. Lastly, the S&P 500 had a 0.8% decline, and leading this decline were the energy, utilities and tech sectors.
The Labor Department reported the latest job losses, claims weekly figures also contributed to the pessimism. The layoffs are continuing and are at 2.4 million. With that, the total number of job losses caused by Covid-19 has touched 39 million. As a result, experts predict a 25% jobless rate for May. All these caused the gains made in the first trading hour to fizzle out. The early gains were due to encouraging quarterly earnings reported by retail chains.
OPEC's supply cuts including the lower inventories of crude, as a result of recovering demand, contributed to the oil prices soaring to the highest level they have ever attained since March. Brent rose 0.87%, 31 cents, to $36.06 per barrel. West Texas Intermediate crude had a 1.28% gain, 43 cents, to end up at $33.92.
The Dow Jones closed at 24,474.12, while the S&P 500 and the Nasdaq Composite closed at 2,948.51 and 9,284.88 respectively.
Friday, May 22, 2020
Equities continued to be under pressure on the final day of the week, as tensions between the US and China continued to rise. It was a generally flat day for stocks, though. While the Dow slipped lower, its weekly surge of 3.29% was the best weekly performance for the index since the 9th of April. The week also saw Nasdaq and the S&P 500 making strong gains. On Friday, both these indexes rose after the National Institute of Allergy and Infectious Diseases director Dr. Anthony Fauci, made encouraging comments regarding the development of a potential vaccine for coronavirus. Fauci remarked that the vaccine developed by Moderna ($MRNA) is “promising”. He also believed this could help reopen the economy.
The Dow dropped 0.04%, 8.96 points, to close at 24,465.16. Among the worst performers of the index were Chevron ($CVX) that dropped 1.91%, while JP Morgan Chase ($JPM) and Caterpillar ($CAT) sank 0.78% and 1.39% respectively. The Nasdaq Composite rose 0.43% to close at 9,324.59, while the S&P 500 closed at 2,955.45 after advancing 0.24%.