Improved sentiment surrounding recent COVID-19 reports provided some welcomed relief for investors, with stocks around the globe trading sharply higher mid-week. Investors risk appetite improved this week with some of the more cyclical sectors like materials and consumer discretionary leading the way. In the fixed income markets, credit spreads improved considerably and areas like high yield and preferred stock were among the best performing assets. On Wednesday, Bernie Sanders announced he dropped out of the 2020 presidential race, helping relieve some of the markets political concerns. On the energy front, oil prices have seemingly started to stabilize following a drastic sell-off during the first quarter of 2020 as optimism surrounding a potential production cut by OPEC continues to grow. In the housing market, mortgage applications declined 33% year-over-year as a weakening economy and a surge in unemployment weighs on housing. Investors will be keeping a close eye on incoming employment numbers as well as first-quarter corporate earnings to calibrate expectations for the economy going forward. Interest rates climbed higher this week as investors took a breather from the ongoing “risk-off” trade in treasuries, with the 10-year note trading around 0.75% mid-week.
Source: Bloomberg, CNBC, WSJ Market Data, GSAM