Happy Wednesday everyone! It is June 24 and the market is down again as traders grow worried about the increasing number of newly confirmed coronavirus cases. We also see that weekly homebuyer mortgage demand has decreased some, but is still 18% higher than a year ago. With so many small businesses expecting to fail due to the pandemic, what will happen to their PPP loans? We are also reading that Peloton shares hit a record high and are up 100% this quarter. And, in other news, Major League Baseball will return for a shortened season limited to more regional play.
Stocks fell on Wednesday as traders grew worried about the increasing number of newly confirmed coronavirus cases. The Dow Jones Industrial Average dropped 232 points at the open, or 0.8%. The S&P 500 dipped 0.7% while the Nasdaq Composite slid 0.3%. The tech-heavy Nasdaq was headed for its first daily decline in nine sessions.
Mortgage rates remained at a record low last week, but refinance demand pulled back anyway. Homebuyer mortgage applications have been surging for five straight weeks, thanks to pent-up demand from March and April and a coronavirus-induced desire by more consumers to find more space and escape urban apartments. Purchase mortgage volume fell 3% for the week but was a remarkable 18% higher than a year ago.
Millions of small businesses have gotten federal aid to help weather the recession caused by the coronavirus pandemic. Despite that relief, many don’t expect to survive the crisis. PPP loans and disaster loans smaller than $25,000 have relatively favorable terms for borrowers and, in the event of bankruptcy, the loans can generally be discharged, they said. But there are important caveats, especially for larger loans made through the EIDL program.
Peleton keeps pedaling higher: Its shares were up 3.5% in Wednesday’s premarket. The exercise bike maker’s stock has rallied more than 100% this quarter, benefiting from the stay-at-home and workout-from-home trend. Cowen upped its price target to a Street high of $70 on Tuesday, calling it a pioneer in the space.
The Major League Baseball Players Association announced Tuesday that players were returning to training in anticipation of a coronavirus-abbreviated 60-game season. “All remaining issues have been resolved and Players are reporting to training camps,” the association said Tuesday night on Twitter. This season, competition will revert to more regional play that will keep teams closer to home to reduce travel and potential exposure.