Afternoon Wrap-up

Equities enjoyed a big day while Treasuries wound up more or less unchanged. News of positive clinical trials for a new virus-treatment drug has created much cautious optimism among stock market investors.

After shrugging off the anticipated news of a Q1 GDP contraction and a larger-than-expected collapse in Personal Consumption, investors also learned of a 20.8% drop in monthly Pending Home Sales helping the year-over-year decline reach almost 15%.

The FOMC also wrapped up its April meeting this afternoon with no change in rates expected and none forthcoming. Chairman Powell, with a nod to this morning’s 4.8% estimated decline in Q1 GDP, commented that Q2 results are likely to be significantly poorer as our economic struggles continue. He also mentioned that further stimulus might be required to counteract the lock-down’s debilitating effects.

Tomorrow brings a full slate of data including the latest, monthly PCE report along with news of Personal Income and Personal Spending. The Ten-Year’s yield will wind up the day at about 62 basis points with the DJIA up over 500 points. WTI will finish its day around $15.50 and that’s up a little over $3 today. Also, it was incorrectly reported in today’s earlier post that Q1 core PCE rose by 1.3%. It actually rose by 1.8%, while the Q1 GDP Price Index grew by 1.3%.