Stocks are posting gains on Monday, with the major benchmark indices rallying to test highs that were made 10 days ago.
The Dow Jones Industrial Average and S&P 500 Index are both up just over 1% midday Monday amid optimism that New York may create a plan for reopening, as the number of coronavirus cases has dropped to levels not seen since March. The Nasdaq Composite has also made gains today, albeit smaller ones, with the benchmark up 0.87%.
Stock index ETFs are also climbing amid the news, with the SPDR S&P 500 ETF Trust (SPY) rallying 1.35%, while the SPDR Dow Jones Industrial Average ETF (DIA) adding 1.2% and the Invesco QQQ Trust (QQQ) up 0.62%.
New York reported 1,184 new coronavirus infections Saturday, while the number of deaths remained mostly steady at 437, a slight increase from Friday’s 422, which was the lowest number of deaths in the state since April 1.
“We want to un-PAUSE. May 15 is when the PAUSE regulations expire statewide. I will extend them in many parts of the state. But in some parts of the state, some regions, you can make the case that we should un-PAUSE on May 15. But you have to be smart about it,” New York Governor Cuomo said. “Start thinking through what it means to reopen.”
Although investors seem to be looking toward a reopening of the United States sooner rather than later, which is reflected in stock indices continuing to rally off their lows of late March and holding near recent highs, some financial experts remain skeptical.
Jeffrey Gundlach, CEO of DoubleLine, said on Monday the stock market could plummet once again to retest the low in March, as he feels investors are too positive about the economic recovery from the coronavirus pandemic and may be discounting the true financial damage that Covid-19 is doing.
“I’m certainly in the camp that we are not out of the woods. I think a retest of the low is very plausible,” Gundlach said on Monday on CNBC’s “Halftime Report.” “I think we’d take out the low.”
Gundlach disclosed that he just initiated a short position against the stock market.
“Actually I did just put a short on the S&P at 2,863. At this level, I think the upside and downside are very poor. I don’t think it could make it to 3,000, but it could. I think downside easily to the lows or beyond… I’m not nearly where I was in February when I was very, very short,” Gundlach said.
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