Weekly Market Update

Author : Rachel Poole
Date : May 9, 2020

Global Market News

Global equities higher on the week
Global equities were higher on the week as markets continue to rally despite the blow to payrolls announced on Friday. The yield on the US 10-year Treasury note rose from 0.62% to 0.68% over the week. Continuing its rise from last week, the price of a barrel of West Texas Intermediate crude increased about $5 to $24.67. Volatility, as measured by the Cboe Volatility Index (VIX) declined several points, from 37.5 to 29.5.

Earnings reports highlight fears
Earnings reports from 85% of the S&P 500 Index shows that earnings growth is running at -13.8%. Furthermore, the reports have demonstrated the enormous pressure on businesses as data shows companies are more scared now than they were during the 2008-09 financial crisis.

Updated Market Figures

Coronavirus Updates

Covid-19 by the numbers
Global Confirmed Covid-19 cases: 3,910,000 Global Covid-19 deaths: 273,000
US Confirmed Covid-19 cases: 1,310,000 US Covid-19 deaths: 77,925

Unemployment hits 14.7%
The US Labor Department reported that nonfarm payrolls fell by 20.5 million in April. The U-3 unemployment rate, which only measures the number of people who are jobless but are actively seeking employment, rose to 14.7%, a post-World War II record. Meanwhile the U-6 unemployment rate, which includes involuntary part-time workers and workers who haven’t looked for a job in the past month, is 22.40%. Employment fell sharply in all major industry sectors, but the leisure and hospitality sector was hit the hardest, falling by 7.7 million.

White House fast-tracks vaccines
The White House is fast-tracking the development of 14 potential vaccines in hopes of meeting the January goal to have a vaccine available for use. In the meantime, the drug remdesivir which has proven to modestly speed recovery, is expected to be in doctor’s hands as early as next week.

Geopolitics Spotlight

US and China say deal is on track
Despite an escalation in tensions earlier in the week, China and the US agree that the phase-one deal is on track. US President Trump had previously threatened to terminate the agreement if China failed to buy promised goods and services from the US. Both countries also agreed that progress is being made on creating the infrastructure necessary to make the pact a success.

Israeli parliament approves new government
Israel’s top court ruled that Prime Minister Benjamin Netanyahu is allowed to govern the country despite his criminal indictment. This paves the way for Netanyahu and his former political rival, Benny Gantz, to rule the country under their unity government. The Israeli parliament passed legislation this week for the formation of the new government, making this Netanyahu’s 5th attempt.

OECD urges Bolsonaro investigation
The Organization for Economic Cooperation (OECD) is urging Brazil to investigate former Justice Minister Sergio Moro’s recent claims that President Jair Bolsonaro tried to tamper with police investigations. Moro’s accusation comes at a time when Bolsonaro’s sons are being investigated for involvement in a defamatory disinformation scheme and having ties to the local mafia. Pressure by the OECD to probe the claim comes just weeks before the bloc meets to discuss Brazil’s candidacy to the organization.

Image of the Week

Hundreds of Earnings Calls Show Companies More Scared Than 2008

Video of the Week

What can we learn about coronavirus from past pandemics? | COVID-19 Special

Source: DW News