George Floyd, SpaceX: O2 Wealth Economic Update, June 5, 2020

U.S. and World News

  • police-1202429977_370On Memorial Day in Minneapolis, George Floyd, an unarmed black man died while being restrained by a police officer with three officers nearby, all of which have been charged with his death. The tragedy was captured in a cell phone video that went viral and sparked nationwide demonstrations last weekend, some of which escalated to violence and looting. The demonstrations have continued throughout the week and are expected to continue during the weekend resulting in curfews being put in place by major U.S. cities. The National Guard has been called in by nearly half of the country to help police protect communities in the event of violence. A memorial was held yesterday in Minneapolis for George Floyd that was broadcast on networks nationwide.
  • Nearly a decade after the United States shelved the space shuttle program, a private U.S. company has launched astronauts into orbit for the first time ever. Private company SpaceX, founded by Elon Musk, launched its Falcon 9 rocket with two American astronauts on board last Saturday to travel to the International Space Station.  An estimated 10.3 million people viewed the broadcast of the launch, the most-watched event that NASA has ever tracked. SpaceX currently holds a $2.6 billion contract with NASA to conduct five more of the crewed flights to the International Space Station.

Markets

  • The markets extended their rally this week. The S&P 500 spiked 4.96% and closed at 3,194. The Dow Jones jumped 6.85% and closed at 27,111. Year-to-date, the S&P 500 is down -0.26% and the Dow Jones is down -3.90%.
  • Yields spiked this week. The 5 year and 10 year U.S. Treasury Notes are yielding 0.46% and 0.88%, respectively.
  • The spot price of WTI Crude climbed higher this week. Prices rose 10.74% and closed at $39.30 per barrel. Year to date, Oil prices are down -35.64%.
  • The spot price of Gold fell -2.77% and closed at $1,682.26 per ounce. Year to date, Gold prices are up 10.87%.

Economic Data

  • Initial jobless claims fell by 246,000 to 1.9 million and the four-week moving average of claims fell by 325,000 to 2.3 million. Claims increased by 57,000 in California, 47,000 in Florida. Claims fell by 134,000 in New York, 21,000 in Georgia, and by 21,000 in Pennsylvania.
  • The ISM manufacturing index rose by 1.6 points to 43.1 versus expectations for a reading of 43.8
  • The ISM non-manufacturing index rose by 3.6 points to 45.4 versus expectations for a reading of 44.4
  • Private sector employment in the ADP fell by 2.8 million versus expectations for a decline of 9 million
  • Factory orders fell by 13.0% versus expectations for a decline of 13.4%
  • Nonfarm payrolls rose 2.5 million versus expectations for a decline of 7.5 million
  • The unemployment rate came in at 13.3% versus expectations for a reading of 19.0%
  • Average hourly earnings fell 1.0% versus expectations for an increase of 1.0% and the year-over-year rate rose 6.7%

Fact of the Week

  • The S&P 500 has returned 37.7% over the last 50 trading days, making it the benchmark index’s largest 50-day rally in history. (Source: LPL Financial)

Rich Gartelmann CFP® – (630) 844-5730 rgartelmann@oldsecond.com
Steve Meves CFA® – (630) 801-2217 smeves@oldsecond.com
Brad Johnson CFA®, CFP® – (630) 906-5545 bjohnson@oldsecond.com
Jacqueline Runnberg CFP® – (630) 966-2462 jrunnberg@oldsecond.com
Ed Gorenz – (630) 906-5467 ejgorenz@oldsecond.com
Mike Demski – (630) 966-2430 mdemski@oldsecond.com
Mike Cava CFA®, CFP® – (630) 281-4522 mcava@oldsecond.com

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