After posting one the largest monthly gain in April, the US market remained relatively flat last week, as investors were caught between optimism over the easing of lockdown measures and grim economic data. Since the US market bottomed out in late March, equity shares have been rising, buoyed by prospects of a gradual reopening of businesses around the country. Then came the bad news, as US consumer spending posted its largest-ever monthly decline in March, along with a continued contraction of US manufacturing and a surge in unemployment claims to over 33 million since mid-March. Risk fell slightly last week, adding to the monthly decline, which totaled 300 basis points, as measured by Axioma’s US short-horizon fundamental model.
See graph from the Russell 1000 Equity Risk Monitor as of 7 May 2020: