May 28, 2020 - Market Update

The 10 year treasury reached a 0.73% yield in early trading yesterday before rallying back to close roughly unchanged at 0.68%.  

Another big day for the stock market.  In the U.S., the Dow was up 2.2% (+553) and the S&P was up 1.5% (+44).  For the holiday shortened week, the Dow and S&P are up +4.43% and +2.7% respectively.  Optimism from signs of an economic recovery and increased stimulus from major economies continues to propel stocks.  Developments in China have the potential to derail recent gains as President Trump vowed to respond to China’s national security legislation as the proposal is seen as a threat to Hong Kong’s autonomy.  Pandemic weakened stocks continue to lead the market rally as travel and trucking stocks are outperforming.

Housing is rebounding surprisingly well! Home prices are solidly rising by the low to mid-single digits, new home sales probably bottomed in March at 619,000, first-time mortgage applications are up 9% Y-o-Y after being down 35% just six weeks ago, and existing sales will bottom no later than June (reflecting contracts signed in April and May).