Morgan Stanley

Last week’s gains led the major averages to their first back-to-back monthly advances since late 2019. The Dow and S&P 500 gained 4.3% and 4.5%, respectively, for May while the Nasdaq Composite advanced 6.8%.

Here’s what traders were monitoring to start the new month:

  • States continue to reopen their economies after the coronavirus pandemic forced the country to shutter nonessential businesses. The reopening is now taking place amid widespread protests across the U.S. over police brutality.
  • Stocks closely linked to the economy reopening continued their gains on Monday. Carnival, Norwegian Cruise Line and Royal Caribbean were all up at least 4%. Hilton Worldwide climbed 2.6% and Marriott International advanced 4.8%. American Airlines and Delta advanced 6.3% and 4.3%, respectively, while United advanced 6.2%.
  • Traders are also grappling with rising tensions between China and the U.S. President Donald Trump said Friday the U.S. would end its special treatment towards Hong Kong.
  • The announcement came after China had approved a national security bill that would increase the mainland’s power over the city. However, Wall Street breathed a sigh of relief as Trump did not say he would pull the U.S. out of the phase one trade deal reached earlier this year.
  • Data showed China’s manufacturing activity expanded in May. Investors have been monitoring China’s economic data for signs of recovery in the country, where the coronavirus was first reported.
  • Disappointing trial results from Pfizer for a breast cancer drug dampened market sentiment. The company made the announcement Friday evening.
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By Editors