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Weekly Market Recap: May 18, 2020

The week in review

  • CPI/Core CPI fell -0.8%/-0.4% m/m
  • New jobless claims at 2,981K
  • Retail sales fell -16.4% m/m
  • Industrial production fell -11.2% m/m
  • Consumer sentiment at 73.7

The week ahead

  • Housing starts & existing home sales
  • Flash services and mfg. PMI

Thought of the week

With “stay at home” orders across the U.S. approaching previously announced deadlines and slowly coming to an end, investors and policymakers alike hope that a reopening of the U.S. economy will mark the start of the recovery. However, while turning off the economy was as easy as flipping a light switch, reopening the economy will require the use of a dimmer, as it is a far more complex and gradual process. As this week’s chart shows, high frequency data can help measure economic activity in real time. While the data broadly shows that economic activity remains depressed and suggests that there has not been a large pick-up in economic activity following these reopenings, it is reassuring that some of these indicators have seemingly troughed, suggesting that barring a second wave of infections, the worst could be behind us.

Additionally, the divergence among industries, in both the severity of declines and reopening progress, suggests not only that certain industries were hit harder than others as aresult of this shutdown, but also that the reopening process will not be uniform across industries. Overall, we continue to believe that the economy is currently experiencing the steepest decline since World War II, and that growth will remain muted throughout the remainder of the year as businesses partially reopen. However, we do anticipate a surge in economic growth once a vaccine or viable treatment becomes available, which will likely be around the middle of 2021.

JPM Weekly market recap may 18 2020

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Past performance does not guarantee future results.

Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. International investing involves a greater degree of risk and increased volatility. There is no guarantee that companies that can issue dividends will declare, continue to pay, or increase dividends. Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage.

JPMorgan Distribution Services, Inc., member of FINRA.

J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. Those businesses include, but are not limited to, J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management, Inc. and JPMorgan Asset Management (Canada) Inc.

©JPMorgan Chase & Co., May 2020

Unless otherwise stated, all data is as of May 18, 2020 or as of most recently available.

Disclosure: J.P. Morgan

Past performance does not guarantee future results.

Diversification does not guarantee investment returns and does not eliminate the risk of loss.

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. International investing involves a greater degree of risk and increased volatility. There is no guarantee that companies that can issue dividends will declare, continue to pay, or increase dividends. Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage.

JPMorgan Distribution Services, Inc., member of FINRA.

J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. Those businesses include, but are not limited to, J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management, Inc. and JPMorgan Asset Management (Canada) Inc.

 

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