InvestNow News – 1st May – ANZ Investments – Weekly Snapshot – April 28
After two winning weeks, US equity markets finished marginally lower last week as economic data continued to come in below expectations and an unprecedented move in the oil markets weighed on sentiment.
For the week, the S&P 500 and Dow Jones Industrial Average both fell around 1.5%. Meanwhile, the NZX 50 underperformed, falling more than 3%.
What’s happening in markets
Coronavirus-related economic data last week continued to paint a fairly bleak outlook for the global economy with a further 4.4 million people filing for unemployment benefits in the US, taking the total to more than 26 million, putting the unemployment rate somewhere between 15% and 20%. However, one positive is that Thursday’s numbers were the fourth-consecutive weekly decline.
Elsewhere, durable goods orders slumped 14.4% in March led by a decline in purchases of so-called big- ticket items like vehicles.
In response to the continuing economic fallout, Congress passed a US$484 billion stimulus package that includes a second round of funding for small businesses.
However, an unprecedented move in oil markets dominated headlines with the price of May WTI prices trading into negative territory; at one point trading to below -$30.
The move came amid a fear that it would be difficult to find a place to store the physical oil as rising supply has eaten into storage capacity and holders were willing to pay people to take the oil off their hands. WTI, or West Texas Intermediate, oil contracts are settled in physical barrels, while Brent crude is cash-settled which is why the prices did not see as sharp a decline as WTI.