The Federal Reserve (Fed) increased its bond exchange-traded funds (ETF) purchases in the week ending May 20 (the most recent data available), adding another $1.5 billion in bond ETFs to its balance sheet, bringing the total holding to $1.8 billion. With Fed purchases accelerating, the average investment-grade corporate bond spread dipped below 2% last week for the first time since March 11. (Credit spreads reflect market participants’ perception of credit risk.) As shown in the LPL Chart of the Day, spreads had been largely flat for about a month following the initial declines off 2020 peaks despite stock market gains, but Fed buying m

Index Performance – Week ending 5/22/2020

Performance as of 1:30 PM ET

S&P 500:  2.96%
Dow Jones Industrial Average:  3.03%
Nasdaq Composite:  3.30%

Equities

US equities delivered solid returns this week. With three hours to go in the week, all three markets were up almost 3% for the week, with the best performer, once again, the technology-heavy Nasdaq. The small cap Russell 2000 Index enjoyed an impressive rally, with the index returning over 9% for the week. The mid-cap S&P 400 Index also had a solid showing, returning almost 9%.

Amid ongoing COVID-19 disruptions, rising une

Leading economic indicators are signaling that the pace of economic deterioration may be slowing. As shown in the LPL Chart of the Day, the Conference Board’s Leading Economic Index (LEI), a composite of leading data series, fell 4.4% month over month in April. While this is an undeniably abysmal reading, it is an improvement from the -7.4% in March.

”The monthly LEI change tends to bottom early in a recession, and sometimes even before a recession’s official start,” said LPL Financial Senior Market Strategist Ryan Detrick. “Stocks are forward looking, so if investors feel confident that the economic

Most economic charts we look at in the LPL Research Department look alike. Many segments of the US economy came to an abrupt halt in March when the lockdowns and business closures began, making most economic charts covering March and April look like a steep drop on a roller coaster.

Two months later, the economy is starting to pick up as states reopen. All 50 states have now reopened to some extent, but traditional economic data is too slow to pick up the change.

We can see the impact of the reopenings in real-time data such as map routing requests by the Apple maps app, shown in the LPL Chart of the Day. More map se