US Equity Markets extended their recent gains last week on continued optimism about an economic recovery as states continue to open back up their economies. The S&P 500 rose 3.0% for the week and has reduced its losses for the year to down 5.8%. The Nasdaq was up 1.8% for the week and is now up 5.8% for the year, while the Russell 2000 (small-cap stocks) increased 2.8% for the week though it remains down 16.5% for the year.
While escalating tensions between the US and China have caught investors' attention, Global Equity Markets still increased last week on rising economic prospects. Developed Markets rose 4.0% for the week with broad-based strength, but they remain down 15.5% for the year. Emerging Markets were up fractionally last week but are down 16.5% for the year.
US companies have largely completed their first quarter earnings reports, and unsurprisingly, it came in as the worst quarter in several years. Specifically, only 64% of companies exceeded earnings expectations and 56% of companies exceeded revenue forecasts, the lowest levels since Q4 2012. Earnings growth for the quarter showed a decline of 14.7%, which is the worst quarter for earnings growth since Q3 2009.
Of Interest to Us
Data last week showed that the US savings rate has surged to a record 33.0%, as many consumers have retained their stimulus checks. That suggests that there could be pent-up demand if indeed consumers begin to gain increased confidence in an economic recovery. In that regard, Consumer Confidence for May ticked up from April, suggesting at the very least some stabilization in consumers' outlooks.
Market Data
for the week ending 5/29/2020
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