Data Points
- The Flash Eurozone PMI Index fell to 13.5 in April from 29.7 in March
- Congress approved a $484 billion bill to fund small business and healthcare relief
- The S&P 500 Index gained +27% as of April 23, 2020 from its 52-week low on March 23, 2020
Top Three Market Headlines
Global Economies Impacted by Lockdown Measures: Results of a series of regional business surveys released last week gave further evidence of the economic toll of lockdown measures across global economies. IHS Markit reported that its Eurozone composite Purchasing Managers Index (PMI), based on survey data collected from businesses, fell to 13.5 in April, the lowest level since July 1998, and down sharply from 29.7 in March and 51.6 in February. Similar dynamics were observed elsewhere around the globe, as composite PMI readings sank to record lows in both the U.K and Japan.
U.S. Congress Approves $484 Billion Relief Bill: On the heels of the $3.2 billion CARES Act passed in late March, the U.S. Congress last week approved an additional $484 billion economic package designed to provide further relief for entities impacted by the COVID-19 pandemic. The bill, signed by President Trump on Friday, will replenish both the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL) with $350 billion and $60 billion, respectively. The PPP helps small businesses cover payroll costs while the EIDL provides grants to help eligible businesses to overcome a temporary loss in revenue. The remaining amount of the bill will be distributed to hospitals and health care providers and also fund efforts to increase COVID-19 testing nationwide.
Risk Assets Rebound from March Lows: Over the last five weeks, risk assets (e.g., equities and riskier sectors of the bond market) have posted a solid rebound that has offset some of the effects of their precipitous plunge from late February through late March. Through last Friday, the S&P 500 Index had recovered by 27% from its recent-cycle low on March 23, 2020, leaving its YTD total return at -11.7%. Corporate bond sectors, including investment grade and high yield corporate bonds, have also benefited, as both the Bloomberg Barclays Corporate Index and Bloomberg Barclays High Yield Index had gained almost 13% from March 23 through last Friday, leaving their YTD returns at 1.5% and -9.5%, respectively.