Wall Street rallied late as investors were relieved President Donald Trump did not eliminate the trade deal with China after its move to eliminate Hong Kong’s autonomy, plus more in today’s Closing Bell on Money & Markets.
The Top Story
All three major U.S. stock market indexes rallied late after Trump addressed China’s approval of a national security bill that aims to end Hong Kong and China’s “one country, two systems” principle.
The S&P 500 and Nasdaq composite both finished Friday in the green, while the Dow Jones was down only 17 points.
Trump announced the U.S. would take steps to eliminate special treatment toward the Chinese territory, but he did not signal the U.S. would go back on phase one of the trade deal between the world’s two largest economies, which was a fear for many investors.
Despite worsening relations between Washington and Beijing, expectations of a quick post-coronavirus pandemic recovery in the economy have driven the S&P 500 about 37% higher from its March lows as it heads for a second straight month of gains.
The benchmark index is now about 11% below its Feb. 19 record high.
Federal Reserve Chair Jerome Powell, while speaking in a webcast organized by Princeton University on Friday, reiterated the U.S. central bank’s promise to use its tools to shore up the economy amid the coronavirus pandemic.
Financials were the biggest drag on the benchmark index after posting their best performance among all major S&P sectors this week. All the top sector indexes were also in the red.
The Dow Jones closed down very slighlty, only 0.07%. The S&P 500 rose 0.5% and the Nasdaq rose 1.3%.
Stock Market Update: Closing Bell*
S&P 500: 3,044 (+0.48%)
DOW: 25,383 (-0.07%)
NASDAQ: 9,489 (+1.29%)
GOLD: $1,745.20 (+0.9%)
BITCOIN: $9,421.55 (-0.5%)
U.S. 10-YEAR YIELD: 0.65% (-0.052%)
*- as of 3:15 p.m.
A Big Win
In this morning’s Opening Bell, we told you to be on the lookout for Costco Wholesale Corp. (Nasdaq: COST). The membership-only retailer said it spent $283 million on coronavirus expenses. Its adjusted earnings dropped 7.5% from last year. Shares of Costco were down 0.3%.
We also mentioned Twitter Inc. (NYSE: TWTR) as its shares dropped 2%. The company has come under fire after removing a tweet from Trump about the unrest in Minneapolis. Twitter said the tweet violated its policy by “glorifying violence.”
Finally, we talked about Salesforce.com Inc. (NYSE: CRM) as the software company only slightly beat Wall Street expectations for earnings and revenue in the last quarter. Light guidance for the next quarter pushed shares of Salesforce down 3.5%.
Golden Nuggets
Mounting fears over the economic toll from the coronavirus, exacerbated by the widening U.S.-China rift, and a resultant environment of low-interest rates globally have put safe-haven bullion on track for a 3% monthly gain.
“Stock market gains are likely to cap gold’s upward momentum, however, gold prices have risen amid a risk-on environment and a risk-off environment,” said Standard Chartered Bank analyst Suki Cooper. “There is good downside support around $1,700 and resistance around $1,765.”
Spot gold climbed 0.7% to $1,730.70 an ounce.
Gold futures moved up 1% to trade at $1,745.40 an ounce. Silver futures were up 2.7% to $18.45.
Platinum jumped 0.6% to $873.60 while palladium rose 0.4% to trade at $1,955 an ounce.
Cannabis Corner
The ability to file for bankruptcy protection continues to elude cannabis producers, even those deemed “essential” during the coronavirus pandemic.
The Department of Justice has a policy that bankruptcy cannot be used to protect illegal businesses, even state-approved marijuana companies, according to Marijuana Business Daily.
That policy has been in place since 2017, but the COVID-19 pandemic has already seen several bankruptcy cases fought in court because they involve some connection with cannabis companies.
Oil On Track For Best Month Ever
Despite moving between gains and losses on the last trading day of the month, West Texas Intermediate crude oil remains on pace for its best month ever.
The U.S. oil benchmark is tracking a 74% gain in the month of May — significantly higher than its previous best month of Sept. 1990, when it gained 44%.
However, the build-up comes a month after oil suffered its worst downturn in history. Its current price of $33.93 is still well off its January 2020 high of $65.65 a barrel.
Slumping demand forced oil producers to scale back as the U.S. cut its production to 11.4 million barrels per day.
Today’s Big Winners:
S&P 500: Domino’s Pizza Inc. (NYSE: DPZ) +5.5%
Nasdaq: Zoom Video Communications Inc. (Nasdaq: ZM) +9.7%
Dow: Intel Corp. (Nasdaq: INTC) +2%
Today’s Big Losers:
S&P 500: DXC Technology Co. (NYSE: DXC) -14.2%
Nasdaq: American Airlines Group Inc. (Nasdaq: AAL) -4.4%
Dow: Raytheon Technologies Corp. (NYSE: RTX) -4.1%
Check back for the most important news and numbers each day after the Closing Bell, only on Money & Markets.