Week Ending: June 5, 2020
Stocks advanced for the third consecutive week and recorded the best weekly gain in two months. Cyclical sectors such as Financials, Industrials, and Energy outperformed while defensive sectors such as Consumer Staples, Healthcare, and Utilities lagged. Small and medium sized businesses also delivered solid gains. Developed foreign stocks in Europe and Asia outperformed U.S stocks during the week and Emerging Market stocks outperformed developed foreign markets.
U.S. Treasury yields rose for the week (bond prices and yields move in opposite directions) as positive economic news pushed the yield on the intermediate and long-term bonds higher. For the third consecutive week, investment grade corporate bonds outperformed government bonds, while high yield (below investment grade corporate bonds) was the top performing asset class. Investment grade corporate bonds are yielding approximately 2.4% and high yield corporate bonds are yielding more than 6%.
The U.S. Labor Department reported that 2.5 million positions were added during the month of May compared to consensus expectations for a decline of around 9 million jobs. In Europe, the European Central Bank increased its stimulus program by EUR 600 billion to EUR 1.35 trillion, extending it until at least June 2021.