TOPLINE
The market opened slightly higher on Tuesday as Wall Street keeps looking ahead to a reopening of the economy, with some states continuing to lift coronavirus lockdown orders.
Investors continue to assess the risks of the U.S. returning to business.
John Nacion/NurPhoto via Getty Images
KEY FACTS
The Dow Jones Industrial Average rose 0.5%, just over 100 points, at Tuesday’s open, while the S&P 500 was up 0.4% and the Nasdaq 0.4%.
Stocks have been rising in recent weeks as Wall Street becomes more optimistic about a reopening of the economy and some states allow businesses to reopen.
Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, will testify before the Senate Health Committee at 10am about reopening the economy.
He plans to say that states reopening too quickly will cause “needless suffering and death,” according to The New York Times.
U.S. consumer prices in April—the latest slew of sobering economic data, showed a drop of 0.8% last month, the most since the Great Recession, according to the Labor Department.
The CBOE Volatility Index (VIX), Wall Street’s fear gauge, has come way down since the market’s wild months in March and April, however: After peaking at 82.7 in late March—amid the height of the coronavirus sell-off, it’s now down to 26.4.
Crucial quote
Stocks are once again “demonstrating impressive resiliency,” moving slightly higher despite “hardly any major macro news” to spur a rally, says Adam Crisafulli, founder of Vital Knowledge. He says that while “it’s certainly encouraging that business conditions appeared to have troughed in early April,” the declines compared to last year “remain enormous and it will be some time before trends return to pre-crisis levels.”
What to watch for
“It’s been a rough year for the banks,” according to Bespoke Investment Group. “Despite coming into this crisis much better capitalized than they were during the last, the sector still hasn’t been able to avoid the pain.” Banks are down about 40% so far in 2020, which is worse than any other industry group in the S&P 500, the firm’s data shows.
Tangent
Boeing CEO Dave Calhoun said in an interview with NBC on Tuesday that he doesn’t expect air travel to return to normal in 2020 and warned that a major airline might go out of business later this year.
Further reading
Why A Private Equity Firm Backed By Bernard Arnault Is Putting $400 Million Into Norwegian Cruise Line
NCLH
Stocks Rally, Dow Rises Over 400 Points Despite Record Job Losses (Forbes)
Stocks Had Their Best Month In 33 Years, But Here’s Why Experts Are Skeptical (Forbes)
The U.S. Economy Will Beat Coronavirus, Buffett Says: ‘Never Bet Against America’ (Forbes)
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