Markets rose on the week behind strength in new safe haven stocks. What is left for the rest of the market?
Monday
The week opened in the green as ISM Non-Manufacturing data outperformed. It came in at 57.1 rather than the 50.1 expected for June. Also, services represent approximately 85% of our economy and it has pushed well into expansionary territory. 50 marks the line between expansion and contraction. This is all great, however, increasing COVID cases and state roll backs on re-opening will likely cause a roll back in PMI data for July.
Tuesday
Markets opened in the red on Tuesday as fears over the infection rate across the country have spiked. 49,895 cases on the 6th, increasing the 7-day average to 49,720 per day. For perspective purposes, the lowest 7-day average since the pandemic first peaked in April was 20,638 cases per day on May 28th.
Wednesday
Markets climbed in the face of rising infection counts in the US. Markets were lifted by comments from Larry Kudlow indicating that there would not be a second shutdown of the US economy.
Thursday
The markets started in the red and stayed there for the day. Falling initial jobless claims did not carry enough weight to sway markets. More of the focus shifted to potential layoffs that will occur at the end of the Paycheck Protection Program for many companies.
Friday
Spurred by hopes of a light at the end of the tunnel, markets rallied heading into the weekend. Gilead announced that Remdesivir was showing proof of reducing deaths caused by COVID-19. This is great news, as case counts across the nation continue to rise.
Conclusion
In spite of the record setting infection rate, markets rose into the weekend. Equities such as Google, Apple, Amazon, and Netflix lead the market higher. As these companies become safe havens in this recession, the rest of the market seems to be getting left behind. This trend is likely to continue until better news about economic activity returns.
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