The last week of April began on a positive note, with investors seemingly encouraged by the partial lifting of lockdowns in some US states and the gradual reopening of major economies overseas. Coronavirus infection and hospitalisation trends appeared to be encouraging, but the overall rate of new cases in the US seemed to be plateauing rather than falling.
News of a possible treatment for patients with the virus helped spark another jump in markets when the manufacturer of the drug remdesivir announced that it had performed well in a large trial in reducing the disease’s severity in patients.
Dr. Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, stated at the White House that remdesivir had a “clear-cut, significant, positive effect in diminishing the time to recovery.”
Progress on a vaccine remained much slower, but investors also appeared to be encouraged by reports that an Oxford University team may have one available as early as September.
While the chance for an exit from the pandemic seemed to improve, the toll the crisis is taking on the economy appeared to grow bleaker.
Stocks fell on Thursday when the Labour Department reported another 3.84 million Americans had filed for unemployment, more than expected, bringing the six-week tally to over 30 million, or approximately 18% of the US working population.
March personal incomes also fell back more than expected, while personal spending tumbled 7.5%, the largest drop since records began over six decades ago.
President Trump seemed to further unsettle markets on Thursday evening by stating he was considering imposing new trade sanctions on China in retaliation for its lack of cooperation early in the pandemic.
The S&P 500 was slightly down 0.2% (-11.6% YTD). Stocks ended mixed for the week, as investors considered some hopeful developments in the battle against the pandemic versus poor economic news and a possible restart to the US-China trade war.
The big winners were energy shares helped by signs crude oil consumption was recovering in some countries and the price of a barrel of Brent rose from US$21.4 to US$26.4.