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Mid-Week Market Minute 04.29.20

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Stocks kicked off this week on a strong note despite worse than expected gross domestic product (GDP) and consumer spending data on the economic front. Companies in some of the more beaten down sectors like Energy, Financials and Industrials saw a nice rebound while the Russell 2000 (small cap index) jumped more than 8% so far this week. On Wednesday, investors got their first glimpse of some key economic data since the start of the coronavirus pandemic. The advanced reading of first quarter GDP showed the economy shrank by -4.8% during the first three months of the year and consumer spending declined sharply, contributing -5.3% to the first quarter’s contraction. Consumer spending accounts for approximately two thirds of GDP and the rapid decline reflects curtailed spending in areas like transportation, recreation, and food services, among others. Fed Chair Jerome Powell is set to host a virtual press conference on Wednesday afternoon following the conclusion of the Federal Reserve’s two-day meeting. While no further immediate action is anticipated, markets will look to Powell for insights into the future path of monetary policy decisions. Interest rates were slightly lower mid-week, with the 2-year and 10-year Treasury notes trading around 0.20% and 0.60% respectively mid-week.

Source: Bloomberg, Bureau of Economic Analysis, WSJ Market Data, GSAM