Now that June is underway, the recent recovery in unemployment and the continued surge in the stock market have managed to surprise just about everyone. These are also hard to fathom in the wake of civil unrest that has been dominating the news in recent days.
Employers, investors, economists and those who are looking at financial opportunities must consider what the action in the markets, the economy and in current events are actually suggesting about the coming days, weeks and months. The stock market and other markets are trying to discount the current trends of weak economic data, weak earnings, and even the civil unrest that is present today. In fact, the stock market is generally anticipated to be a live money voting instrument for where the economy will be in six months or so.
Sometimes the best way to get a message out is visually in charts and graphs. 24/7 Wall St. has created a weekly review of some of the best charts, tables, graphics and other images that should be given deep consideration for the coming days and further out based on what is happening now and what is expected to occur ahead. Anyone who has their assets in stocks or bonds better have an understanding of what the markets are trying to tell them.
For the week ending June 6, 2020, there is a lot at stake for the summer and later in the year as the election cycle will go into overdrive. The Dow closed up 829 points at 27,110.98 and the S&P 500 closed up 81.58 at 3,193.93. The NASDAQ has even managed to hit a new high of 9.845.69. Meanwhile in rising yields, the 10-year Treasury note looks ready to challenge 1% and the 30-year Treasury long bond may be ready to challenge 1.75% again.
We have first covered the S&P 500 more than once, as well as The Boeing Company (NYSE: BA), Hertz Global Holdings, Inc. (NYSE: HTZ), gold, Treasuries, oil, bonds, and bitcoin. A special note has been provided around the COVID-19 impact on the market and a tropical storm that is likely to be a U.S. issue in very short order.
A brief commentary has been provided on each chart and graphic, as has the source of each item featured. While these have all been numbered, there is no intended ranking of importance of each chart or graphic as that importance will depend upon each reader’s interests. Here are the 10 top charts we are seeing heading into the week of June 8 to June 12, 2020.
1. No More Bear Market: Can the S&P 500 Actually Turn Positive for 2020?
The S&P 500 has magically, miraculously and almost unbelievably recaptured most of its losses. In fact, after hitting 3,200 late on Friday the S&P 500 was down just 5.7% from its all-time high in February and was somehow down only 1% year-to-date.
This almost doesn’t even seem possible considering how almost every business is still worse off than it was before that isolated coronavirus news in China turned into a global pandemic and an instant recession. Oh well, you can scratch your head, think about it, and then overthink it. It’s almost assured that the stock market doesn’t care what you, me, or any other individual thinks. And if the thought of “it just can’t keep going” comes to mind, never forget this mantra — the market can remain irrational for far longer than you can remain solvent with conviction about a position.
Please look closely at the chart here. After the S&P 500 experienced its first day of panic (2/24), it went just under 3,215 and closed at 3,226 on a rounded basis. Those levels had also acted as a support in January three different times before continuing its run higher in February. Like it or not, do not think that those slightly higher prices are not significant levels even if we have blown back above the 200-day simple moving average. Want more proof: the S&P hit a high of 3,211.72 on Friday.
Source: Barchart.com (S&P 500 Index)
More charts with summaries on the S&P 500, Boeing, Hertz, bonds, oil, gold and bitcoin are shown in detail on the remaining pages.