The Market Sum | Insight after the bell Friday's Headlines 1. US markets rally into close, but lower for the week 2. Trump signs new stimulus bill 3. How far from the bottom? 4. Denmark in the lead 5. What's up for next week? Dow
23,775.27
+260.01
(+1.11%) | | S&P
2,836.74
+38.94
(+1.39%) | | Nasdaq
8,634.52
+139.77
(+1.65%) | | | | | | Bitcoin
$7,559.86
+$114.35
(+1.54%) | | US 10-Yr Yield
0.596
−0.017
(-2.77%) | | | | | | Russell 2000
1,233.05
(-26.10%) | | Crude Oil
$17.07
(-72.26%) | | US 10-Yr Yield
0.596
(-68.94%) | | | | image: Chris Chambers/Getty Markets Today U.S. markets staged a late Friday afternoon rally to close at session highs, capping off a very volatile week, especially in the oil sector. The major indexes ended the week lower, breaking a two-week streak, but April is on pace to beat the best month for stocks since 2011. The rally from the late March bottom has been exceptional (more below). President Trump signed the new $484 billion stimulus bill today, the latest barrage of government aid aimed at bolstering small businesses, supporting healthcare and, increasing testing. The payload of fiscal policy has caused the U.S. budget deficit to quadruple, but no one is paying attention to that. Georgia became the first state to relax its social distancing measures today by opening some bars, restaurants, and gyms. Other states are watching closely to see what happens. We all are, but recent polls show we are still pretty scared. That's OK. Have a great weekend.  **Survey alert: We are running another survey of our U.S. newsletter readers to learn more about your views on these volatile markets and moves you may or may not be making in your portfolios. We don't do anything creepy or untoward with the information you provide... I promise. If you would, please take this brief survey, and we'll let you know what we learn. Thanks!** Headlines: - The federal budget is expected to quadruple to $3.7 trillion, as the U.S. government has been on a spending spree to combat the recession caused by the coronavirus pandemic, according to the Congressional Budget Office. The CBO is predicting a devastating hit to the economy this quarter at an annualized rate of decline of 40%, accompanied by a 14% unemployment rate.
- Facebook rolled out several new video-calling features, including Messenger Rooms, which allows users to host video calls of up to 50 people. Facebook also announced that it's doubling WhatsApp's video call person limit from four people to eight people. Additionally, the company is introducing a video calling feature to Facebook Dating so users of that service can go on virtual dates.
- AT&T Chief Executive Randall Stephenson said he will retire at the end of June, handing leadership of one of the world's largest media and telecommunications companies to longtime deputy John Stankey. His exit comes after the company reached a truce with the activist investor, Elliott Management, which had been pushing for a strategic review of assets.
- Overall orders for durable goods—products designed to last at least three years—were down 14.4% in March, the biggest monthly drop since Aug. 2014. New orders for aircraft and parts fell by more than $16.3 billion in March from February, a 296% decline, the Commerce Department said Friday.
- Millions of U.S. homeowners have already stopped paying their mortgage. Over 3.4 million borrowers, representing 6.4% of all mortgages outstanding, are now in forbearance plans. That's a jump of 477,000 loans in just one week, or a nearly 9% increase, according to Black Knight, a mortgage data and analytics firm.
- Google is slashing its marketing budgets by as much as half for the second half of the year, according to internal materials viewed by CNBC. "We are re-evaluating the pace of our investment plans for the remainder of 2020 and will focus on a select number of important marketing efforts," said a company spokesperson.
- Nestle, the world's largest food and beverage company, saw 4.3% organic sales growth in the first quarter as customers stockpiled products. The biggest contributors were Purina PetCare, prepared dishes and cooking aids, coffee, and nutritional therapy. Due to changes in its portfolio, total sales decreased by 6.2% to 20.8 billion Swiss francs.
chart courtesy YCharts  chart courtesy YCharts A Month From the Lows It has been anything but a smooth ride, but the trip up from the market lows of late March has been remarkable. A month and a day from the most recent bottom, the S&P 500, the Russell 2000, the Nasdaq Composite, and the DJIA Transports have all rallied 20% or more. What hasn't rallied? Volatility, as the VIX, or Fear Index, as it is known, has fallen over 40% since late March. The big tech stocks like Microsoft and Amazon have helped lift the Nasdaq and the S&P 500, but the rally for the Russell 2000 and the Transports is noteworthy. The Russell 2000 is a market weighted index of 2,000 small capitalization companies. No FAANG stocks allowed. The DJIA Transports, which include airlines and truckers, were crushed in the first wave of the sell-off, but have bounced back as hopes for an economic recovery this summer spring eternal.  Denmark Out in Front When you look around the world, one stock market rules them all. Denmark wears the ring as its OMX Copenhagen Index is almost even for the year. The reason? Roughly half the benchmark's weighting comes from shares of pharmaceutical companies, which have been more resilient than most sectors through the volatility. Green stocks have also added to the boost. Denmark has already opened primary schools and allowed some small businesses to resume their work, even as other countries, such as the U.K., Spain, and Italy, have extended curbs. The country was quick to test for COVID-19, which helps. It also helps to only have 5.8 million people. What to Expect Next Week? First, here's how different asset classes have been doing:  Here's a list of economic events for the week ahead:
Monday, April 27th:
- Bank of Japan Interest Rate Decisions and Monetary Policy Statement
- Brazilian Central Bank Market Readout
Tuesday, April 28th:
- Bank of Japan Press Conference
- U.S. Preliminary Trade Balance in Goods (March)
- S&P/Case-Shiller House Price Index (February)
- Conference Board Consumer Confidence (April)
- U.S. Retail Inventories (except autos) (March)
Wednesday, April 29th:
- Market Holiday in Japan for Showa Day
- German Preliminary Consumer Price Index (CPI) (April)
- U.S. Preliminary Gross Domestic Product (GDP) (Q1)
- U.S. Pending Home Sales (March)
- U.S. Federal Reserve Interest Rate Decision and Statement
- Japanese Preliminary Industrial Production (March)
- Japanese Retail Sales (March)
- Chinese Manufacturing PMI (April)
Thursday, April 30th:
- Markets Holiday in Hong Kong for the Birthday of the Buddha
- Market Holiday in South Korea for Vesak Day
- French Preliminary GDP (Q1)
- U.K. Housing Price Index (April)
- German Retail Sales (March)
- French Consumer Spending (March)
- French Preliminary CPI (April)
- German Unemployment Rate (April)
- Eurozone Preliminary GDP (Q1)
- Eurozone Preliminary CPI (April)
- Eurozone Unemployment Rate (March)
- European Central Bank Interest Rate Decision and Monetary Policy Statement
- U.S. Personal Consumption Expenditure (PCE) (March)
- U.S. Weekly Initial Jobless Claims
- Canadian GDP (February)
- Chicago Purchasing Manager's Index (April)
- Tokyo Core CPI (April)
Friday, May 1st:
- Market Holiday in China, Germany, Switzerland, Italy, Brazil, France, Russia, and Mexico, among many others, for Labor Day
- Market Holiday in India for Maharashtra Day
- U.K. Manufacturing PMI (April)
- U.S. Manufacturing PMI (April)
- U.S. ISM Manufacturing PMI (April)
Big Week for Earnings
There are a huge number of earnings being released over the next week. Just out of the companies we cover, there are almost a dozen. That bunch includes many of the world's largest companies, such as Microsoft and Amazon. Since it would be unwieldy to go through each one here, we've made this table to help you navigate our earnings coverage for the upcoming week. If you want to see each of our earnings previews for these, you can find our earnings coverage here.
 U.S. and Chinese PMIs
This coming week, China and the U.S. will release purchasing managers' indexes (PMIs) for April. These measures of business activity are important gauges for how the economy is doing. What makes these notable is that the U.K., Japan, Germany, and France have already released PMIs, and all three showed drastic declines, even greater than their declines in March. More evidence that news will be grim is the U.S. flash PMI, a preview using 85% of the overall survey responses used in the PMI, which was released on April 23rd. You can read all the numbers here, but the chief business economist for IHS, who does the flash PMI surveys, said, "The deterioration in the flash PMI numbers indicates a rate of contraction exceeding that seen even at the height of the global financial crisis, with jobs also being slashed at a rate far exceeding anything previously recorded by the survey."
Fed, ECB, and BOJ Interest Rate Announcements
One last quick note. The U.S. Federal Reserve, the European Central Bank, and the Bank of Japan will all make interest rate announcements in the coming week. That said, there is unlikely to be any interest rate movement from any of them. The Federal Reserve has said it won't use negative interest rates, so U.S. interest rates are as low as they can go. The eurozone and Japan already have negative interest rates, and economists don't expect the ECB or BOJ to push them lower. SPONSORED BY INVESCO
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LEARN MORE > Shares of Freeport-McMoRan are up by 8.5% today. The copper mining company announced several measures to mitigate the impact of the ongoing pandemic, such as cutting its operating costs (18%), capital expenditures (30%), and exploration costs (20%). Tractor Supply's stock price rose by 7%. The agricultural supplies retailer reported that it's looking to fill roughly 5,000 positions in its stores across the country. Shares of Boeing are down by over 6% as the airplane maker's Q1 results revealed permanent layoffs and further production delays for its 787 Dreamliner jets. Norwegian Cruise Line Holdings' stock price fell by more than 5% following the global cruise company announcing an extension on its suspension of voyages. Word of the Day Budget Deficit A budget deficit occurs when expenses exceed revenue and indicate the financial health of a country. The government generally uses the term budget deficit when referring to spending rather than businesses or individuals. Accrued deficits form national debt. In cases where a budget deficit is identified, current expenses exceed the amount of income received through standard operations. A nation wishing to correct its budget deficit may need to cut back on certain expenditures, increase revenue-generating activities, or employ a combination of the two.  image: Gentlemen's Journal Today in History April 24th, 1990: Michael Milken, former king of the junk-bond underwriting business, pleads guilty to five technical counts of violating securities laws. He is later sentenced to ten years in federal prison but is released early for good behavior. Jesse Kornbluth, Highly Confident: The Crime and Punishment of Michael Milken (William Morrow & Co., New York, 1992), p. 300. Enjoy the Market Sum? Share it with a friend. CONNECT WITH INVESTOPEDIA |
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