1/28/20 Market Notes
The S&P 500 added to last week’s 1% loss, declining another 1 ½% as supply chain fears related to the Coronavirus gripped investors. The Dow Jones Industrial Average fell a similar (percentage) 453 points, as all eleven sectors of the S&P declined. Sectors and companies that were most likely to be impacted by any supply chain disruptions were impacted the most, as the Technology and Energy sectors both declined about 2 ½%; Consumer Staples and Utilities fared best, each only falling slightly more than ¼%. It is clear that large investors and traders were seeking safe haven assets on Monday, as the Ten Year Treasury Yield declined to 1.587%, while gold prices and the U.S. dollar appreciated more modestly. Equity market participants seemed to get particularly unnerved by reports that several car manufacturers have recalled employees and are temporarily halting production at some factories.
The sell-off is continuing in Asia, as the main Chinese market site, the Shanghai index is off another 2 ¾% this morning. The South Korean KOPSI index is off by more than 3%, as additional cases of the Coronavirus have been identified in that nation. European bourses are in the green this morning, as investors in that region are hopeful that aggressive action to contain the virus will be successful. Premarket U.S. equity futures are pointing to a mildly higher open this Tuesday morning, as better than forecast earnings are offsetting virus related fears, and investors wait for the latest Home Sales data.
In addition to economic data and tomorrow’s press conference by Fed Chair Jerome Powell, investors are sure to focus on key earnings reports, which include (today) Apple (AAPL), Pfizer (PFE), 3M (MMM), Lockheed Martin (LMT), and (tomorrow) Microsoft (MSFT), Facebook (FB) and The Boeing Company (BA).
Disclosures: This market commentary is written by the 1879 Advisors Investment Committee and represents the views of 1879 Advisors. This commentary is not investment advice and should not be used as a basis to make investment decisions. Please consult with your registered investment advisor before making any investment decisions.