Retail Sales Spike 17.7%, a Look Ahead at Recovery, and Are Equities Too Dependent on Stimulus?

U.S. retail activity came back with a vengeance in May following April’s disastrous 14.7% plunge—the 17.7% spike is the largest ever monthly increase in spending and could hint at reemerging consumer sentiment. Manufacturing activity, another strong indicator of economic health, has followed a similar trend, but what does recovery look like in other sectors? The markets have staged a remarkable comeback in recent months and climbed yet again on news of yet more government stimulus, but investors remain torn between reopening optimism and anxiety over infection spikes—COVID-19 cases rose again in Florida and Texas hospitalizations have reached a record high. The popularity of index funds has soared in recent years, but with markets still turning on a dime, we’re wondering if investors may start to crave more active management. The Fed is fighting hard to prop up the markets and the White House is reportedly drafting a $1 trillion infrastructure spending proposal to inject some life into the economy, but are these massive stimulus efforts sustainable?