April 6-10, 2020
What happened last week
Global markets made gains as positive COVID-19 news emerged
Signs that global efforts to contain COVID-19 are making progress, in key hot spots, helped markets gain momentum throughout the week. The U.S. reported its infection rate was slowing, while Italy posted their fewest new cases since mid-March. In China, the lockdown in Wuhan came to an end and passenger trains and flights were once again leaving the city. China has implemented strict measures to track movements and prevent a second outbreak of the virus.
Markets remained strong through early trading Thursday, following the U.S. Federal Reserve (the Fed) announcement of a US$2.3-trillion initiative to help local governments, as well as small- and mid-sized businesses. The Fed will enable banks to offer four-year loans to companies of up to 10,000 employees. Banks can also directly buy bonds from states, counties and cities to help these jurisdictions raise funds to respond to the health crisis.
Oil took centre stage
On Thursday, the Organization of the Petroleum Exporting Countries (OPEC) and partners reached a deal to cut oil production to stem the collapse in prices caused by COVID-19 and the price war between Saudi Arabian and Russian oil producers. Earlier in the week, U.S. President Donald Trump, who tried to broker a deal between Saudi Arabia and Russia, announced the U.S. will cut its oil output forecast by more than one million barrels a day to support oil prices.
Earlier in the week, Alberta Premier Jason Kenney said the collapse in oil prices, along with the global economic recession brought on by COVID-19, represents the greatest challenge in the province’s modern history. He warned that there’s a “very real possibility” of negative prices for Alberta’s energy products. “I cannot overstate how grave the implications of this will
be for jobs, the economy, and the financial security of Albertans,” Kenney said.
Canada and the U.S. reported rising unemployment
Statistics Canada reported that the economy lost 1.01 million jobs in March, the largest monthly decline dating back to 1976. The jobless rate rose to 7.8%, up from 5.6% in February. More than 4 million Canadians have applied for emergency income support since the government began taking action to slow the spread of COVID-19.
The U.S. Department of Labor reported 6.6 million people filed for unemployment benefits during the previous week, the second largest number of initial unemployment claims since they began tracking data in 1967. Over 16 million Americans filed for jobless benefits in the prior three weeks.
The stock and bond market*
|Dow Jones Industrial Avg.
|S&P 500 Index
| 10-yr GoC Yield
|10-yr U.S. Treasury Yield
|WTI Crude Oil (US$/bbl)
|Bank of Canada Prime Rate 2.45%
*Weekly performance ending April 9, 2020. Sources: www.bloomberg.com, www.msci.com, www.bankofcanada.ca and www.treasury.gov.
Bank of Canada interest-rate announcement and Monetary Policy Report
The Bank of Canada is scheduled to provide a monetary policy update on Wednesday. The Bank has previously indicated it’s prepared to adjust policy as required to support economic growth and keep inflation on target as the country deals with the impacts of COVID-19.
Circle these dates
- April 28-29:U.S. Federal Reserve meetings and statement
- Jun. 1: 2019 income-tax filing deadline
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