Stocks soared on Monday, rebounding after sharp losses last week, as investors celebrated early signs that the coronavirus pandemic shows signs of slowing down thanks to lockdown measures in Europe and the United States, though these small successes will likely be followed a tough week ahead as cases begin to peak.
- The Dow Jones Industrial Average gained 7.8%, more than 1,600 points, on Monday, while the S&P 500 rose 7.2% and the Nasdaq Composite gained 7.3%.
- New York Governor Andrew Cuomo said in a Monday press conference that the state’s number of hospitalizations and deaths due to coronavirus is plateauing, which means that “social distancing is working,” because the total number of infections is lower than what was originally projected.
- Retail stocks like Nordstrom JWN and Kohl’s KSS led the rally, along with travel stocks and Boeing BA, which surged more than 15%.
- Despite today’s gains, however, investors should brace for a rough week ahead. “Everyone is just desperate for good pieces of news,” Peter Cecchini, chief market strategist at Cantor Fitzgerald, told the Wall Street Journal. “It doesn’t necessarily reflect anything fundamental. Nothing’s changed.”
- Oil prices, which gained a record 24% last week on the hopes that Saudi Arabia and Russia would agree on production cuts to put an end to the price war that has devastated the oil market, dropped 3.2% today after a key meeting between Russia and OPEC was postponed.
Crucial quote: In his annual letter this morning, JPMorgan JPM CEO Jamie Dimon warned that shareholders should expect a “bad recession combined with some kind of financial stress similar to the global financial crisis of 2008.”
Big number: The U.S. death toll from COVID-19 eclipsed 10,000 on Monday afternoon.
Surprising fact: The federal government is now on track to directly subsidize more than half of the U.S. workforce, according to economist Martin Sullivan, chief economist for Tax Analysts. “A mind staggering percentage of the U.S. workforce is going to get their wages subsidized by this legislation,” Sullivan says. “The labor market has been hit by an unprecedented category six storm. The federal government has responded with an off-the-chart emergency relief package,’’ he adds.