S&P 500 Erases 2020 Losses as Last US City Reopens After Lockdown

US equities surged on Monday, erasing 2020 losses as New York City, the final US city left on lockdown, enters phase one of reopening.  New York City began reopening yesterday as 400,000 workers returned to construction jobs, manufacturing sites and retail stores in “phase one” of the four phase reopening process. New York City was the final US city left on lockdown, and now joins the rest of the country in beginning a long path to economic recovery. Meanwhile, US equities continued their torrid rally yesterday, the S&P 500 climbing back to flat on the year while the Nasdaq closed at an all-time high.  Treasury yields and swap rates were in turn mixed across a flattening curve. This morning, rates and equities are both lower as the rally in risk assets takes a breather.

Fed tweaks minimum loan size, allowing more businesses to participate in the Main Street Lending Program.  With the program set to begin operations in a matter of days, the Fed has reduced the minimum loan size to $250,000 and increased the maximum to $300 million. The Fed has also extended loan repayment periods – pushing out interest-only periods by a year.  Fed Chair Jerome Powell commented, “I am confident the changes we are making will improve the ability of the Main Street Lending Program to support employment during this difficult period.”

Day ahead.  April job openings and wholesale inventories will be released later on this morning. Forecasts call for job openings to decline while wholesale inventories are expected to climb modestly by 0.40%.  The two-day FOMC meeting begins today.