US Equity Markets surged higher last week amid much better-than-expected economic data that provided investors with increased confidence in a US economic recovery. The S&P 500 rallied 4.9% for the week and is now only down 1.1% for year. The Nasdaq rose to all-time highs, up 3.4% for the week, to extend its gains for the year to 9.4%, while the Russell 2000 (small-cap stocks) spiked up 8.1% for the week to reduce its losses for the year to down 9.7%.
Global Equity Markets rallied as well last week, helped by new economic stimulus measures proposed by the European Central Bank (ECB). As a result, Developed Markets rose 7.1% for the week with European shares leading the way. For the year, Developed Markets are now down 9.5%. Emerging Markets increased 7.7% for the week to reduce its losses for the year to down 10.0%.
US interest rates increased notably last week thanks to increased confidence in the outlook for the US economy. Yields on the US 10-Year Treasury rose to 0.90% from 0.66% the prior week. The yield curve has steepened over the past several weeks, with the US 2-Year Treasury now at 0.21%, indicating a spread between 2-Year and 10-Year Treasuries of 0.69%.
Of Interest to Us
US Economic Data from last week was significantly better than expectations. The most notable data came from the Nonfarm Payrolls report for May, which showed job gains of over 2.5 million for the month, well ahead of expectations of job losses in excess of 8.0 million. Roughly half of the job gains came from the leisure and hospitality sector as workers returned to their jobs. The Unemployment Rate for May was 13.3%, down from April levels and much better than the 19.5% that was expected. Measures of US manufacturing activity and services activity for May improved nicely from April, while auto sales for May were markedly higher than forecasts.
Market Data
for the week ending 6/5/2020
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