What To Know About The Stock Market's Best Week Since 1974

The S&P 500 came roaring back to life this week, recording its best week of gains since 1974 in just four days of trading.

Investors Cheer Social Distancing Payoff

One of the biggest drivers of last week’s stock market gains was a series of signs that the spread of COVID-19 is slowing. The number of new daily cases in both the U.S. and around the world slowed last week, and the state of New York reported a drop in its coronavirus hospitalization rate.

While the business world waits and watches for further signs of improvement, the U.S. economy is still getting hammered by coronavirus-related shutdowns. On Thursday, the Labor Department reported Americans made more than 6.6 million new jobless claims in the week ending April 4.

“There’s still going to be a couple more readings well north of a million…but I think a good chunk of the impact to labor markets has played out rather abruptly,” said Shawn Cruz, manager of trader strategy at TD Ameritrade.

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Fed Takes More Action

On Thursday, the Federal Reserve unveiled details of its $2.3 trillion stimulus programs aimed at supporting small and medium-sized U.S. businesses and ensuring adequate liquidity in credit markets.

“What the Fed did signals that they will do whatever it takes to shore up credit markets,” Cruz said.

In a webinar following the announcement, Fed Chair Jerome Powell said the near-term economic outlook is challenging, but the eventual rebound “can be robust.”

“I think the sense is just as fast as they shut everything down, as soon as we start opening things up they’ll probably start coming online very quickly,” Cruz said.

Shares of Walt Disney Co DIS gained more than 11% on the week after the company reported its Disney+ streaming service launched in November now has more than 50 million paid subscribers. The latest tally is nearly double the number of paid subscribers Disney reported in its fourth-quarter earnings report in February.

Earnings In Focus

Next week, investors brace for the beginning of what could be a brutal first-quarter earnings season.

Investors will be paying particularly close attention to big bank earnings reports from JPMorgan Chase and Wells Fargo on Tuesday and Citigroup and Bank of America on Wednesday. In addition to the banks, Johnson & Johnson is reporting on Tuesday and UnitedHealth is reporting on Wednesday.

Wall Street analysts are expecting S&P 500 earnings to fall by 7.3% in the first quarter, according to FactSet.

Economic Numbers

This week, key economic updatts include weekly U.S. initial jobless claims expected out on Thursday and China’s first-quarter GDP estimate expected out on Friday.