2/13/20 Market Notes
The Dow Jones Industrial Average soared 275 points (0.94%) on Wednesday, as a 4.36% gain by United Health Corp (UNH) and a 1.72% gain by Walgreens Boots Alliance (WBA) helped lift the index to near its all-time high. The S&P 500 gained 0.65%, as the Consumer Staples sector was the sole sector comprising the index to decline with a 0.04% loss. The energy sector faired best with a 1.36% gain as oil prices climbed by more than 3% to end at $51.54 per barrel. The benchmark Ten Year Treasury yield climbed to 1.637%, the upper end of its recent trading range, while the U.S. dollar strengthened against major currencies, in spite of an official report showing that the U.S. budget deficit ballooned to $1.1 Trillion in 2019. Fourth quarter earnings season is slowly coming to a close, with the last meaningful wave of companies – 191 of them – reporting earnings today. Amongst these are Nvidia Corp (NVDA), Alibaba (BABA), Kraft Heinz Corp (KHC), PepsiCo (PEP) and Pfizer’s animal health spinoff Zoetis (ZTS). While nearly 2/3rd of the companies that have reported earnings so far have exceeded analyst’s forecasts, year-over-year earnings growth for the quarter will likely show a decline, making it the fourth quarter in a row of earnings declines, according to research firm FactSet. Before the market opens this morning, market participants will get the latest inflation reading via the Consumer Price Index, which is expected to show a rise of 0.2% in January, excluding the volatile Food & Energy components. On Friday, the latest Industrial Production, Capacity Utilization, Retail Sales and Consumer Sentiment data will be released. Asian and European bourses are down about 1% in overnight trading, and premarket U.S. equity futures are pointing to a sharply lower open this morning after China reported more than 15,000 additional cases of coronavirus.
Disclosures: This market commentary is written by the 1879 Advisors 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.