China on the Comeback

China  said yesterday that its official Purchasing Manager’s Index for March was 52.0, beating expectations for an economy hit hard by the coronavirus outbreak. PMI readings above 50 indicate expansion, while those below that level signal contraction.

In February, China's official PMI had hit a record low of 35.7. While there's reason to suspect the accuracy of these numbers, this is a positive sign for how quickly an economy can rebound from the pandemic.

Earlier this year, manufacturing activity slowed dramatically in China as the government instituted large-scale lockdowns and quarantines. This week, China’s Ministry of Industry and Information Technology said that as of March 28, the resumption-of-work rate for larger industrial enterprises was 98.6 percent, and the return of workers stood at 89.9 percent.

A Week of Recovery

Here's a mark you probably weren't expecting to be set: The Dow Jones Industrial Average just notched its best weekly gain since 1938, despite falling by 4.1 percent in Friday's trading. For the week, the Dow booked a gain of 12.8 percent, its strongest weekly performance in 82 years.

The S&P 500 finished down 3.4 percent on Friday, but still had a weekly gain of 10.3 percent. The Nasdaq Composite fell 3.8 percent on Friday, but on the week it’s up 9.1 percent. For both of those indexes, it was their best week since March 2009, when the markets bottomed out after the financial meltdown.

The Dow was aided by a comeback for the ages from blue-chip component Boeing, which surged 70.5 percent for the week. That was its best weekly gain ever.

Three Million Jobless Claims

A sobering economic number is out this morning: Americans displaced by the coronavirus crisis filed unemployment claims in record numbers last week, with the Labor Department reporting a surge to 3.28 million new filers.

That number shatters the Great Recession peak of 665,000 from March 2009, as well as the all-time mark of 695,000 in October 1982. The number for the previous week, which reflected the period before the worst of the coronavirus hit, was 282,000.

But the news isn't all bad. The House is expected to pass a $2 trillion stimulus bill, already approved by the Senate, tomorrow morning, which should help ameliorate the job losses. Putting everything together, the market is happy about these moves, with stocks moving higher in early trading this morning.

The Market Bounces Back

Finally, we had some good news on Wall Street yesterday. The Dow Jones Industrial Average soared 11.4 percent, for its best one-day percentage performance since 1933. The S&P 500 Index was up 9.4 percent, while the Nasdaq Composite added 8.1 percent. The rally seemed to be a response to Congress nearing a conclusion on its stimulus bill.

More than 300 stocks in the S&P 500 gained at least 10 percent on the day. Five of them gained more than 35 percent, including:

• Norwegian Cruise Line, up 42.3 percent
• L Brands, up 39.0 percent
• DXC Technology, up 38.2 percent
• American Airlines, up 35.8 percent
• Alliance Data Systems, up 35.4 percent
• MGM Resorts International, up 33.2 percent

The Toll of the Virus

A majority of Americans have already seen their finances affected by the coronavirus pandemic, according to a new survey by LendingTree. Some 63 percent of the respondents said their finances had already been affected in some way by the coronavirus, with 27 percent reporting stock market losses and 21 percent saying they had spent more money on supplies than they could afford.

Forty percent of survey participants said their paycheck had already been hit by the coronavirus’ spread. Another 35 percent had had their hours at work reduced or eliminated, and 5 percent had lost tips or commissions.

Looking ahead, 21 percent of all Americans in the survey and 28 percent of those with children under 18 expect their finances to be severely affected by the pandemic. Another 35 percent said their finances would be somewhat affected. Seventeen percent are worried about their ability to pay bills, and 10 percent had lost money on nonrefundable travel plans.

The Fed's New Action

Saying “aggressive action” was needed to combat the coronavirus pandemic, the Federal Reserve announced this morning that it would purchase an unlimited amount of Treasury bonds and securities tied to home and business mortgages. The goal is to prop up the economy and ward off a credit crunch.

The Fed said it would buy assets “in the amounts needed” to support smooth market functioning and effective transmission of monetary policy. It had previously set a $700 billion limit for its asset purchase programs.

In addition, the Fed announced several new lending programs worth $300 billion to support all corners of the financial markets. The market apparently was very happy with these moves, as Dow futures accelerated after the announcement was made.

Are Stocks Settling Down?

We had a rare occurrence on Wall Stret yesterday: A relatively normal day for the stock market. The Dow Jones industrial average swung more than 1,200 points from its low to its high point, but in the end, it finished up just under 1 percent, or 188 points. It was the first time since March 6 that the index closed within 1,000 points from where it opened.

The S&P 500 closed up 0.5 percent, also by far its most modest finish since the start of the month. The Nasdaq Composite, which was the best performer of the day, ended up 2.3 percent.

Leading the way yesterday was the energy sector, which gained about 5 percent on the day. It was bolstered by the fact that U.S. oil prices spiked by 24 percent, marking a record one-day percentage gain.