MANHATTAN (CN) — Markets looked poised to build on a fair Monday opening but closed at roughly the same point.
The Dow Jones Industrial Average finished at 24,128 points, a 1.5% increase for the day. A late-day rally tempered off by the closing bell. The S&P 500 and Nasdaq had similar ups and downs on Monday.
What looked calm on Wall Street stands in stark contrast, however, to a Monday poll by the Pew Research Center that showed only 23% of Americans think the economy is excellent or good. Just over half of those polled think the U.S. economy will be better a year from now.
Wall Street, on the other hand, seems to have a brighter view of the U.S. economy, with investors spurred by news that several states would reopen business soon.
Texas, Alabama and Georgia are among those opening up shuttered restaurants and retail stores. Ohio has pegged May 12 as when some businesses can open their doors.
Other states are remaining closed. New York, which was hardest hit by Covid-19, decided to cancel the 2020 Democratic presidential primary citing health concerns.
In neighboring New Jersey, Governor Phil Murphy has discussed reopening the state, citing the massive economic cost on the state, but gave no timeline. Murphy also said he first wants to see a major decrease in cases.
“I don’t know when we’ll be able to formally and finally start this journey,” Murphy tweeted on Monday. “We will be ready to put the car in gear as soon as we see a green light.”
New Jersey has been one of the states hardest hit by Covid-19. According to data compiled by Johns Hopkins University, more than 110,000 New Jerseyans have contracted the virus, while just under 6,000 have died. New York’s numbers are nearly triple that, with nearly 292,000 confirmed infections and 17,303 deaths as of Monday afternoon.
In an interview on CNBC Monday, Murphy said New Jersey faces “Armageddon” but would not file for bankruptcy — an idea posed last week to widespread derision by Senate Majority Mitch McConnell. Instead, Murphy said the state would “gut the living daylights” out of social programs to make up for budget shortfalls.
“We need federal help,” Murphy said, noting New Jersey would not be able to pay state employees in several weeks if no help comes.
Some European countries are now debating how to reopen their economies. The Stoxx 600 closed up 1.6%, while markets in Germany and France gained 3% and 2.5%, respectively.
European markets also are poised for a good day. As of 8 a.m. EST, the pan-European Stoxx 600 up about 1.7%. Even further along were Germany and France, whose markets had increased more than 2% each for the day.
The relative cheer on Wall Street may be short-lived. A number of large companies will post earnings reports this week for the first quarter of 2020.
According to an analysis by DataTrek, companies have reported a 15.2% average decline in earnings and flat revenues during Q1 2020.
“By these numbers, the Covid-19 Crisis is not as bad as the Financial Crisis, when S&P 500 earnings fell by just over 50% over a 2-year stretch,” according to DataTrek’s Monday morning investor’s note. “The back half of the year should be ‘less bad’ than Q2.”
DataTrek predicts the third quarter of this year will see earnings from nearly 17%, with 3.4% decrease in corporate earnings in the fourth quarter.
An April 21 survey of the S&P 500 by FactSet that found that first-quarter earnings are on track to drop nearly 16%. That marks the largest overall earnings decline since the second quarter of 2009, FactSet states.
Earnings reports are only likely to get worse next quarter, as the crop includes revenues through March. Shutdowns and social distancing began in March, but the economic downturn began to intensify in April.
Dozens of companies releasing their earnings Monday, among them Keurig, Dr. Pepper and Knoll Inc., will do so after markets close. Several large corporations — among them Apple, Amazon, McDonald’s, and Starbucks — will release their earnings reports later this week for the first quarter of 2020.