Investors continued to bank on a smooth economic recovery out of the coronavirus lockdown, pushing U.S. stock market indexes higher even amid civil unrest, protests and riots, plus more in today’s Closing Bell on Money & Markets.
The Top Story
Investors are seemingly unfazed by civil unrest across the country as protests over the death of Minnesota man George Floyd while he was in police custody continue, pushing all three major stock market indexes higher.
All three major stock market indexes are creeping closer to their all-time highs reached back in February. The Nasdaq is only 3% off its recent high. The S&P 500 and Dow are 9% and 13% off, respectively.
Abysmal economic data and simmering U.S.-China tensions have also likely been priced into the markets already as stocks continue to rise on the hope of a smooth recovery from the COVID-19 lockdown.
In fact, many investors are now piling into stocks that were downtrodden during the coronavirus crash.
“There is that rotation going on as traders add more risk to their portfolios with securities that have been beaten up and should benefit as the economy recovers,” said Tim Ghriskey, chief investment strategist at Inverness Counsel, according to Reuters.
The Dow rose 1%, the S&P 500 was up 0.8% higher and the Nasdaq rose 0.6%.
Stock Market Update: Closing Bell*
S&P 500: 3,080 (+0.82%)
DOW: 25,742 (+1.05%)
NASDAQ: 9,608 (+0.59%)
RUSSELL: 1,417 (+0.89%)
GOLD: $1,735.50 (-0.84%)
BITCOIN: $9,503.50 (-0.6%)
U.S. 10-YEAR YIELD: 0.68% (+0.02)
*- as of 4:10 p.m.
A Big Win
In this morning’s Opening Bell, we discussed Land’s End Inc.’s (Nasdaq: LE) earnings falling short of Wall Street expectations. The news hammered the stock price, which closed 11.1% lower.
We also spotlighted Starbucks Corp. (Nasdaq: SBUX), which is reducing hours for some workers through at least the summer as it deals with lowered demand while the economy tries to get rolling again. The stock closed 0.7% lower.
Moneygram International Inc.’s (Nasdaq: MGI) stock was still up almost 30% after it was revealed earlier Tuesday that The Western Union Co. (NYSE: WU) had submitted a takeover bid of the money transfer rival. Western Union’s stock closed 11.3% higher.
Gold prices slipped as investors jumped back into riskier assets on the prospect of a smooth economic recovery.
U.S. spot gold was down 0.8% to $1,725.60 per ounce around 4:10 p.m. EDT. Gold futures were also trading 0.9% lower.
“There is continuation of optimism in regards to the reopening of the economy, shown in the ongoing rally in equities. Under that premise, it’s easy to understand gold could be slightly vulnerable,” said David Meger, director of metals trading at High Ridge Futures, according to Reuters.
Other precious metals weren’t faring much better. Silver futures took a hit, trading 2.6% lower at $18.34 per ounce, while platinum futures sank 3.5% to $869.90 per ounce. Palladium was doing a little better, but was still trading 0.6% lower at $1,976.80 per ounce.
A plan for marijuana and CBD research is now being reviewed by the White House after the Food and Drug Administration submitted guidance last week.
There aren’t many details on what the draft contains, but an FDA spokesperson said a lot of the documentation revolves around developing broader CBD regulations that could make it easier for cannabis products to be marketed as dietary supplements or food items, according to Marijuana Moment.
CBD, or cannabidiol, is a popular hemp byproduct that has shown particular effectiveness in treating a number of health maladies.
Fed Projects 53% GDP Slump in Second Quarter
The Atlanta Federal Reserve’s GDPNow outlook tool is projecting economic activity in the U.S. to fall by 52.8% in the second quarter after much of the country was under lockdown to slow the spread of the deadly coronavirus.
Looking deeper into the data shows personal consumption expenditures are projected to sink by 58.1%. Consumers drive the economy, and these expenditures make up 68% of America’s GDP. Gross private domestic investment, which is 17% of GDP, may experience a 62.6% fall, according to the data.
Today’s Big Winners
S&P 500: Western Union Co. (NYSE: WU) +11.3%
Nasdaq: Align Technology Inc. (Nasdaq: ALGN) +5.3%
Dow: Dow Inc. (NYSE: DOW) +5.1%
Today’s Big Losers
S&P 500: Tiffany & Co. (NYSE: TIF) -8.9%
Nasdaq: NorthLifeLock Inc. (Nasdaq: NLOK) -3%
Dow: Raytheon Technologies Corp. (NYSE: RTX) -1.1%
Check back for the most important news and numbers each day after the Closing Bell, only on Money & Markets.