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The three-day weekend did traders and the economy some good: Stocks spent much of the short week rallying, as the country began opening up after the Memorial Day holiday. The constant theme over the last few months has continued to be the effects of the coronavirus and the policies designed to stop its spread. However, with rates of infection starting to slow, a multitude of states have continued to relax social distancing, work from home orders, and business restrictions. This wave of optimism kept stocks moving higher.
Also helping this week was better-than-expected data. While signs that the economy is slowing prevail, they were lessened this week. Better unemployment data, as well as bottoming industrial reports, showed that the economy could snap back rather quickly from the COVID-19 disaster.
Corporate actions kept the market in check as several more firms announced dividend cuts, bankruptcies and poor earnings growth. Guidance continued to remain weak as well.
Nonetheless, the potential for a great reopening of the economy proved too good and many traders saw it as an opportunity to buy.
Be sure to check out our previous Wrap here, when volatility surged and the market’s whip-sawed.