The major indices traded firmly lower this morning as more than 36.5 million Americans have lost their jobs and fears of another wave of the virus and a longer economic recovery crept into the market.  The Dow, however, has erased early losses of over 400 points, trading down to 22,790, and is now up almost 1% to 23,455.  While President Trump dismissed the Democrats proposed $3T stimulus plan, he said he is not against a Phase 4 plan.

The S&P 500 has also gone positive after being down 1.9%.  While there is no specific reason that point to the rebound, sentiment has gotten better leading investor to hunt for bargains, especially in Financials and Energy. 

There is speculation that Goldman Sachs (GS) is going to make a play for Wells Fargo (WFC), and that has added a boost to Financials.  Energy is traded up today despite lower forecast in demand.

The U.S. Energy Information Administration (EIA) is out with its forecast and expects U.S. crude oil production to decline in 2020 and 2021 due to the pandemic and as demand continues to drop. The EIA, in its May Short-Term Energy Outlook (STEO), anticipates U.S. crude oil production will average 11.7 million barrels per day in 2020 and 10.9 million in 2021, 0.5 million and 1.3 million barrels per day lower, respectively, than in 2019 when it was 12.2 million barrels per day.

Three S&P 500 are in the green.  Technology, which has been a clear winner of late, is laggard today, despite good earnings out of Cisco (CSCO).  The Nasdaq is also trying hard to go positive.

Breadth is mixed, but companies hitting 52-week lows are in control today. 

JP Morgan Chase Institute reported credit-card spending fell by 40% y/y by the end of March, as stay-at-home order took effect in most of the U.S. The report showed that, credit card spending on essentials spiked 20% at the start of lockdowns before falling back, while spending on non-essentials sank by 50% and dropped 70%.

Credit card users who report household incomes of less than $39,000 reduced spending by 38%, while users with incomes of more than $92,000, reduced spending by 46%. The report tracked only spending on Chase credit cards. It did not track spending with cash, debit cards or other bank credit cards. 

April was also tracking with a similar decline. However, as states reopen, patterns should change over time. And while the report was backward looking, MasterCard saw spending beginning to transition from stabilization to normalization.