As we near the end of April, US index markets are set for their biggest monthly gains in recent decades. This has come at a time where the US has become the epicenter of the Coronavirus pandemic, with a reported amount of over 1 million cases.
This number accounts for a third of the global infections, and with over 50,000 deaths, which is a quarter of the total. These numbers have led to lockdowns of close to all US states.
These lockdowns have meant that the vast majority of consumer facing businesses are currently shut, with only essentially services or operations remaining open, whilst all others being told to work from home. As a result more than 20 million people in the US are now said to have claimed joblessness in the past 4 weeks, meaning that this is the largest unemployment crisis in the history of the world’s largest economy.
Reaction of Financial Markets
Although life in the US has dramatically changed over the past few weeks, leading to several key fundamental indicators showing that the state of the economy is at its worst point in history, Indices have continued to rise.
In April so far, the S&P500 gained close to 11.5% which is said to be the biggest one-month surge since 1987. The Dow Jones is up close to 10.1%, which is the largest since 2002. Finally the NASDAQ, which sees it’s largest companies announce their quarterly earnings this week, saw a 13.1% gain, which also is the biggest one month gain since 2002.
In regards to the NASDAQ which has had the largest percentage increase of all major US indices, this week could see that figure continue to grow. This comes as a result of several of the world’s largest companies, like APPLE and Microsoft all get set to announce their performance for the first quarter of 2020.
Who’s reporting earnings this week?
Aside from NASDAQ listed companies, there are a host of the largest companies in the United States, and the world which will lift the hood, to show markets how they have performed during this period of historical panic.
Here is a list of the key companies that will publish performance this week.
Tuesday: Alpahabet, Ford, Starbucks, Pepsi
Wednesday: Microsoft, Facebook
Thursday: Apple, Amazon
Friday: AON, Exxon Mobil, Chevron
Wednesday will also see the FOMC rate decision where Jerome Powell who cut rates twice in March, gives an update on what the US Federal Reserve plans to do in respect to further monetary policy action.
Depending on the performance of some of these companies, and any potential moves from the FED, US markets may enter the month of May on course to recover the majority of losses suffered due to COVID-19. However if significant losses are revealed, those bulls in the market now, may soon turn into bears.