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Mid-Week Market Minute 04.22.20

News |

Unparalleled developments in the energy markets weighed on investor sentiment this week with stocks around the world trading sharply lower. The violent shake-out in the front-month (May) WTI crude oil futures contract caused oil prices to briefly plunge into negative territory for the first time in history. The perfect storm of an extraordinarily weak fundamental backdrop and technical dislocations in the marketplace were the main drivers of the decline. Corporate earnings season is well underway, with approximately 20% of U.S. companies reporting first quarter earnings this week. Investors will be dissecting these reports for details on how the coronavirus pandemic will impact the current and future path of corporate profits. From a policy standpoint, a new round of stimulus awaits approval in Congress on Thursday that would allow for an additional $484 billion of funds to help boost support for small businesses. The stimulus calls for an additional $310 billion to the Paycheck Protection Program (PPP)  with the remaining funds going towards further small business emergency grants and loans, hospitals, and expanded coronavirus testing efforts. Interest rates drifted slightly lower this week, with the yield on the 2-year and 10-year Treasury notes trading at 0.21% and 0.61% respectively.

Source: Bloomberg, CNBC, WSJ Market Data, GSAM