Optimism surrounding the reopening of the economy helped fuel the rally in stocks as the holiday shortened week kicked off. The S&P 500 rallied about 1.5% mid-week, while international markets fared even better with the MSCI EAFE gaining about 3.5% as Europe and Japan unveiled plans for further stimulus. Markets seem to be pricing in more good news than bad at this point, shrugging off the potential impacts of second wave of the coronavirus as well as the ongoing tensions between the U.S. and China. On the economic front, housing data remains very strong with new homes sales coming in much better than expected for the month of April. The consumer confidence index rose to 86.6 in May, a slight uptick from April’s reading of 85.7 reflecting improving consumer sentiment. Going forward, investors will be keying in on some of the more meaningful economic indicators such as durable goods, gross domestic product (GDP), jobless claims and consumer spending slated for later this week. Despite the increased risk appetite this week, interest rates crept lower with the yields on the 2-year and 10-year Treasury notes trading around 0.16% and 0.67% respectively mid-week.
Source: Bloomberg, FactSet, WSJ Market Data, GSAM