A re-acceleration in COVID-19 cases caused some states to delay the gradual re-opening of their economies, leading to a decline in US Equity Markets last week. The S&P 500 fell 2.9% for the week to bring its losses for the year to down 6.9%. The Nasdaq dropped 1.9% for the week but remains up 8.7% for the year, while the Russell 2000 (small-cap stocks) decreased 2.8% for the week and is now down 17.4% for the year.
Global Equity Markets declined but held up better than US markets last week, as China's recovery appears to be accelerating, boosting Asian stocks. Developed Markets dropped 1.5% for the week with rising coronavirus concerns in Europe weighing on those equities. For the year, Developed Markets are now down 13.0%. Emerging Markets only ticked down 0.3% on Chinese strength, but remain down 10.4% for the year.
US interest rates fell last week on rising US economic concerns due to the spike in coronavirus cases. The yield on the US 10-Year Treasury dipped to 0.65% from 0.70% the prior week and has declined from 1.92% at the beginning of the year. The yield curve remains positively sloped, with the spread between 2-Year Treasuries and 10-Year Treasuries at 0.49%.
Of Interest to Us
While an economic stall in the US could change things quickly, the massive global stimulus response to the coronavirus has started to cause a rebound in global economic activity. A key metric that we watch, the global Purchasing Manager's Index (PMI's), bounced up to 47.1% in June from 42.3% in May and below 40% in April. Measures above 50% suggest an expansionary economy, so it is not there yet, but the global stimulus measures have things moving in the right direction.
Market Data
for the week ending 6/26/2020
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