US Equity Markets rallied last week as positive vaccine news combined with enthusiasm around the ongoing re-opening of the US economy to encourage investors. The S&P 500 increased 3.2% for the week and is now down 8.5% for the year. The Nasdaq was up 3.4% for the week to bring its gains for the year to 3.9%, while the Russell 2000 (small-cap stocks) surged 7.8% for the week though it remains down 18.8% for the year.
Global equity markets rose last week despite rising tensions between the US and China around trade, Hong Kong, and the coronavirus. Developed Markets were up 3.7% for the week but remain down 18.7% for the year. Emerging Markets increased 3.2% for the week and are now down 16.6% for the year.
The re-opening up of the US economy has started to be felt in US fixed income markets as well. After rising notably in March/April on concerns about corporations' and municipalities' ability to pay their debts, both corporate and muni rates nationally have declined including a meaningful drop last week. The average yield on corporate bonds fell last week to 2.55% from 2.74% the prior week, and the average yield on muni bonds nationally fell to 2.75% from 2.89% the prior week.
Of Interest to Us
US home buyers appear to be coming back into the market much faster than expected. Weekly mortgage application data that came out last week show that purchase volume was only down 1.5% from a year ago. That compares to declines of over 35% about a month ago. This suggests healthy demand despite coronavirus-related shutdowns and recent job losses.
for the week ending 5/22/2020
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