Dow Up, Gun Stocks Jump
As social tensions flare up to levels some have already begun comparing the civil unrest to the 1960s. That's while the stock market blissfully stormed ahead on Tuesday, with all three major indices gaining ground. The S&P 500 is now up a whopping 40% from its March lows.
As investors following the markets likely already know, the narrative behind the rapid rally since March first focused on the course of the virus, and then shifted to the upside offered by businesses reopening across the U.S. and other parts of the world.
The Dow Jones Industrial Average jumped 267 points, or 1.1%, on Tuesday, to finish at 25,742.
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Fed gauge: GDP to fall 53% in Q2. A measure of growth domestic product expectations for the second quarter maintained by the Federal Reserve Bank of Atlanta is now projecting a 53% stumble in the quarter for April to June. That's a steeper decline than the roughly 40% drop it was projecting just weeks ago.
The Fed's GDPNow model cites a combination of recent lousy economic data that came out on Monday showing the decimation of American manufacturing and a weaker-than-expected construction spending report.
Gun stocks rally on rising social tensions. Nowadays the market is more an accumulation of algorithms than the collective hive mind of yore, but if you could describe its psychology, "cynical" might be an appropriate adjective.
During the social unrest in major U.S. cities over the last week stemming from the death of African-American George Floyd at the hands of a Minneapolis police officer, Wall Street is bidding gun stocks higher in a recurring pattern that sometimes follows mass shootings.
Sturm Ruger & Company (ticker: RGR) added 4.3% on Tuesday, while Smith & Wesson's parent company, American Outdoor Brands Corp. ( SWBI), surged 10.1%.
