A record surge in retail sales during the month of May, along with positive data on COVID-19 mortality rate using a generic steroid, ultimately pushed stocks upward after another volatile morning, plus more in today’s Closing Bell on Money & Markets.
Retail Sales Surge in May
Retail receipts rose 17.7% in May as Americans got back to spending after weeks in lockdown due to the novel coronavirus, according to a report from the Commerce Department. The news sent stocks upward, even though the rebound won’t come close to making up the losses suffered during March and April.
Retailers like Kohl’s Corp. (NYSE: KSS) and Nordstrom Inc. (NYSE: JWN) helped push the S&P 500 up 1.9%.
“We’re continuing to see better-than-expected economic data fuel this bull rally,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
The Dow Jones Industrial Average also surged higher after choppy trading early, rising 526 points. The Dow also saw choppy trading through Monday before closing up 157 points.
“The (S&P 500) followed last week’s sizable drawdown with a daily positive reversal for the ages yesterday,” said Frank Cappelleri, executive director at Instinet. “If there was ever an example of unadulterated dip buying, we saw it yesterday.”
The Nasdaq came into the day up 12.08% on the year, and it closed 1.7% higher.
Wow! May retail sales show biggest one-month increase of ALL TIME, up 17.7%. Far bigger than projected. Looks like a BIG DAY FOR THE STOCK MARKET, AND JOBS!
— Donald J. Trump (@realDonaldTrump) June 16, 2020
Stock Market Update: Closing Bell*
S&P 500: 3,124 (+1.90%)
DOW: 26,289 (+2.04%)
NASDAQ: 9,895 (+1.75%)
RUSSELL: 1,447 (+1.97%)
GOLD: $1,735.30 (+0.469%)
BITCOIN: $9,498.96 (+0.94%)
U.S. 10-YEAR YIELD: 0.75% (+0.048)
*- as of 4:10 p.m.
A Big Win
We told you to be on the lookout for Chesapeake Energy Corp. (NYSE: CHK), which cratered 18.4% after reports showed the company could file for bankruptcy as early as this week. The company also is negotiating a near-$900 million loan to support operations.
Golden Nuggets
Gold moved upward on concerns of a new coronavirus outbreak in China countered the positive U.S. economic data mentioned above. Spot gold rose 0.1% to $1,726.10 per ounce. Gold futures also gained about 0.4% to $1,735.10.
Beijing raised its COVID-19 emergency response from Level III to Level II, according to state media.
“Gold is gaining after Beijing suddenly tightened the measures, with schools shut and people advised not to leave the city unless necessary,” said Alex Turro, market strategist at RJO Futures.
Meanwhile, palladium rose 1% to $1,927.06 an ounce, falling off a bit from its highest price hit since June 10, $1,965.21, which it hit earlier in the day. Platinum rose 1.6% to $824.50, and silver was up about 0.2% to $17.47 an ounce.
Cannabis Corner
After more than 2 1/2 months in the coronavirus pandemic, cannabis sales in five of the country’s biggest recreational cannabis markets are mixed.
Oregon and Washington state — where most sales go to in-state residents rather than tourists — both saw sharp increases, suggesting consumption is rising during the lockdown. This indicates the industry also is well-positioned to weather a long period of economic instability, according to the Marijuana Business Report.
Oregon’s sales increased 60% in May year over year, breaking the $100 million mark last month for the first time since legalization in 2015.
Washington also saw a nice jump in sales over the three-month period including March, April and May, which increased 28.5% year over year.
Generic Steroid Drug Slashes Mortality Rate in U.K. Trials
A trial in the U.K. showed giving low doses of a generic steroid called dexamethasone to patients hospitalized with COVID-19 helped reduce the mortality rate by a full third among patients on ventilators. For patients being given oxygen, it reduced deaths by a fifth.
According to researchers, had the drug been administered at the start of the outbreak, it could have saved up to 5,000 lives.
Prime Minister Boris Johnson called the breakthrough “a remarkable British scientific achievement.”
“We have taken steps to ensure we have enough supplies, even in the event of a second peak,” Johnson added, according to BBC News.
Today’s Big Winners
S&P 500: Eli Lilly and Co. (NYSE: LLY) +15.7%
Nasdaq: Ross Stores Inc. (Nasdaq: ROST) +6.9%
Dow: Caterpillar Inc. (NYSE: CAT) +5.2%
Today’s Big Losers
S&P 500: Fox Corp. Class A (Nasdaq: FOXA) -2.9%
Nasdaq: Fox Corp. Class A (Nasdaq: FOXA) -2.9%
Dow: Pfizer (NYSE: PFE) -0.1%
Check back for the most important news and numbers each day after the Closing Bell, only on Money & Markets.