Stocks traded lower this week as policymakers and officials around the world continue to grapple with the conundrum of reopening the economy. On Wednesday, investors shifted their attention to Fed Chair Jerome Powell’s speech noting “while the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks.” Despite many lobbying the Fed to take interest rates into negative territory, Powell reiterated the committee’s view has not changed and negative rates are not something they are currently considering. On the data front, Consumer Price Index (CPI) came in at a record -0.4% in April, with the Producer Price Index (PPI) also decreasing by 1.3% last month. Going forward, investors will be keeping an eye on Thursday’s jobless claims as well as industrial production and retail sales data out of China on Friday. In Washington, House Democrats released the draft of a “Phase 4” fiscal package estimated to cost $3 trillion with aid to states, payments to individuals, expanded unemployment insurance, and other policy changes. Oil prices marched higher this week, with WTI crude trading around $25.50 amidst production cuts and declining stocks in the U.S. storage hub of Cushing, Oklahoma. Interest rates were lower mid-week, with the yield on the 2-year and 10-year Treasury notes trading around 0.13% and 0.64% respectively.
Source: Bloomberg, FactSet, WSJ Market Data, GSAM