Investing

Car sales are up, and other news affecting your money in the week ahead

Twenty/20

The U.S. stock market just capped off two straight weeks of gains, something it hadn't done since mid-April. And as of Friday's close, the S&P 500 is down less than 6% for the year.

The market's gains have come amid signs that the worst of the economic damage from the coronavirus pandemic may be abating. While nearly 40 million American workers have filed for jobless benefits since mid-March, the total number of people who are still unemployed has fallen.

The week ahead will deliver one of the most closely watched reports on Wall Street: the monthly labor report. Economists currently expect that the unemployment rate reached 19% in May. Meanwhile, traders will monitor reports on manufacturing, auto sales, and the continued surge in oil prices.

Here's what to watch in the stock market during the week ahead — and how the news could affect your bottom line.

Economists forecast another jump in the unemployment rate

What's happening: The Department of Labor's monthly employment report is scheduled for release on June 5, and it's likely to reflect the continued toll of the coronavirus outbreak. 

Economists are projecting less severe job losses of about 7 million in May versus the 20.5 million lost in April. Still, these experts forecast that the unemployment rate surged to 19%, which would be the most since the Great Depression.

Traders will also monitor the industries that were hiring during the month of May to assess where the economy is growing.

VIDEO2:5002:50
How to reinvent yourself during unemployment

Video by Stephen Parkhurst

Why it matters: The latest report detailing weekly unemployment claims gave people on Wall Street reason to be optimistic that the worst of the pandemic may be over. Broader reopening plans in states nationwide beginning on June 1 could give traders confidence the economy will rebound quickly — a bet they've already been making in recent weeks.

That said, a recession already is underway, according to experts, and the Federal Reserve recently found that some workers are hesitant or are unable to come back to their jobs for reasons including safety concerns and lack of child care.

What it means for you: If you're out of work, there may be additional assistance on the way in the form of a second stimulus check. Make sure to file for unemployment benefits, if you haven't yet; catch the eye of recruiters by optimizing your LinkedIn profile; find some ways to earn extra cash while you look for a new job; and consider these tips from experts if you're considering starting your own business.

Finally, because employment is one of the most-watched economic indicators on Wall Street, expect there will be some short-term volatility in the stock market surrounding these reports — especially if there are surprises.

VIDEO3:1203:12
3 tips for starting a business during coronavirus

Video by Jason Armesto

Vehicle sales accelerated in May

What's happening: April marked the worst month for automobile sales since data started to be collected in 1980. Economists currently project that the pace of new vehicle sales accelerated in May, to about 11.7 million, which would be slightly more than in March, but still far below the prior six-month average of about 16.8 million.

Meanwhile, oil prices jumped nearly 80% in May, amid higher demand for gas in the U.S.

Why it matters: By cutting interest rates to near zero, the Fed hoped to encourage borrowing among consumers and businesses, such as taking out a loan to buy a new vehicle. What's more, some people who didn't previously own cars have considered buying them now as a safer alternative to public transportation, given the health concerns related to the coronavirus. 

VIDEO4:1604:16
How this couple saved $1,500 buying a new car during the pandemic

Video by Stephen Parkhurst

What it means for you: If you're in the market for a new car, one silver lining of the pandemic is some good deals. Many car brands have offered incentives and discounts to buyers. The car rental company Hertz, for example, is declaring bankruptcy — and that means it's selling Corvettes marked down by $20,000. 

Even if you're not shopping for a new car, what your neighbors do matters to the overall economy. While motor vehicles and parts make up a small fraction of gross domestic product (GDP) in 2018, overall consumer spending accounts for more than two-thirds of U.S. economic growth. If Americans feel more confident about making big-ticket purchases like a vehicle right now, that's generally a good sign.

VIDEO4:5704:57
How to avoid common auto loan mistakes

Video by Jason Armesto

The bottom line

May marked a second straight month of gains for the U.S. stock market, and the S&P 500 is about 10% below its all-time high set in mid-February. In the weeks ahead, traders will remain focused on reopening efforts around the country and how quickly different parts of the economy are rebounding. Experts caution that there's likely to be turbulence ahead.

Tech stocks have led the market's rebound, and serve as reminder of the long-term merits of investing. And the past few months have attracted new investors who have taken advantage of a "generational opportunity" to buy stocks at lower prices. 

Whether you're a seasoned investor or have just started your journey, remember to keep a long-term perspective with your portfolio and avoid making emotional decisions. That's because some people on Wall Street are optimistic about the prospects for stocks in 2020 and believe the worst of the declines has passed — which partly explains why the market is already rebounding.

Finally, it's important to remember that downturns can benefit long-term investors and selling during a decline could be the biggest mistake of your investing career. In fact, right now could be a "real opportunity to create wealth."

More from Grow:

acorns+cnbcacorns cnbc

Join Acorns

GET STARTED

About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2019 Acorns and/or its affiliates.

NBCUniversal and Comcast Ventures are investors in Acorns Grow Incorporated.