Tuesday, June 2, 2020

Making Sense of the Rally


By Alex Eule |  Thursday, May 28
Back to the Future. As investors continued to look at 2021 and a post-coronavirus world, they likely didn't expect to be brought back to 2019's issues. But that's what happened this afternoon, when the White House said it would be making new comments tomorrow about China. While wrapping up an Oval Office press briefing about hurricane season, President Donald Trump said, "Tomorrow we’re going to be having a press conference on China. We’ll be making decisions, and we’ll be discussing them tomorrow."
With that, stocks erased their gains for the day. The Dow Jones Industrial Average closed down 148 points, or 0.6%. Tomorrow's press conference will come as U.S.-China tensions ramp up again around Covid-19, technology, and the status of Hong Kong. Those issues suggest any announcement won't be a Kumbaya moment, and investors are worried that the fragile U.S.-China trade deal could be fraying. 
The Dow was up 211 points around 2 p.m. today, with investors finding some optimism inside the latest report on jobless claims. While another 2.1 million Americans filed for unemployment, the number of new claims has now decreased for eight consecutive weeks. That might not offer much solace to the 40 million Americans who have already filed claims since the pandemic began, but it came as good news to investors.
The number of continuing claims also fell to 21.1 million -- lower than economists had expected -- from 24.9 million last week. Barron's Lisa Beilfuss has more on the jobless numbers here
As May nears a close, the S&P 500 is up 4% on the month, and it's currently up 17% over the last two months. If that gain holds, it would be the index's best two-month stretch since April 2009. 

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