Finally, Congress has delivered an impressive piece of legislation for the U.S. citizens, designed to bridge the gap until we can restart the country. Wait a minute, I’m getting word that nothing has emerged yet from the Congress? Ok, there has been indications that they are close to a bill, and quite frankly if they fumble the ball at this point today’s gains could quickly be eradicated.
That’s right, stocks were up today. Sure, the anticipation of a bill from Congress surely contributed to the gains, but these gains are more likely attributable to the President’s indication that he wants this country to get back to work sooner than later. Indeed, there is a worry that the cure could end up being much worse than the virus itself. Now, I’m no doctor, and I’m sure we need caution at this point, but the markets need to be clued in on what is the plan. So, it’s not a surprise that, however vague the plan may be, at least it appears we are talking weeks instead of months. The markets fear that months means recession at best and depression at worst.
As mentioned, the stocks advanced wildly in another sharp counter trend rally (dead cat bounce?). For the day, the Dow Jones Industrial Average was up 2,112 points to finish the day at 20,704. The S&P 500 was up 209 points to close at 2,447. Gold was up a whopping $100 to trade at $1,667 per ounce, while oil was up $.70 to trade at $24.06 per barrel WTI. The rally in in gold, oil, and bonds, not to mention stocks, once again seems to indicate that the fierce liquidation phase we saw over the past few weeks might be past us.
Let’s see if Congress can deliver that legislation tonight or tomorrow.
Have a nice evening everyone.