2/21/20 Market Notes
After initially dropping by more than 300 points, the Dow Jones Industrial Average and other major U.S. stock indexes mounted a comeback in the afternoon hours. It is unclear what caused the sharp market sell-off in the late morning hours, as both the February Philadelphia Manufacturing Index and the January Leading Indicators index surpassed expectations. By the time the closing bell rand, the Dow cut its losses by more than half to end the session 128 points (0.44%) lower, while the S&P 500 lost 0.38% and the NASDAQ fell 0.67%. Seven of the eleven sectors comprising the S&P ended lower, as the Healthcare, Technology and Communication Services sectors fell the most, while the Real Estate sector had the strongest gains, ending 1.15% higher. Treasury yields declined across the board, with the benchmark Ten Year bond trading below 1.50% on Friday morning. Oil prices are reversing their recent rally, falling nearly 2% as demand concerns pressure the commodity space as a whole, conversely, safe haven assets like Gold and the U.S. dollar are reaping the benefits, as they continue to climb. Asian and European bourses are lower in overnight trading as the spread of the coronavirus continues to unsettle investors and mixed earnings are renewing concerns of stagnant economies in Europe. Premarket U.S. equity futures are pointing to a lower open as market participants struggle to find solid reasons to push stocks beyond their current record highs. Looking ahead to next week, investors will get some more earnings news, especially on Tuesday when Salesforce (CRM), Macy’s (M) and Home Depot (HD) all report. Moreover, the economic data release calendar is quite full, and includes:
Monday: Chicago Fed National Activity Index
Tuesday: Home Prices and Consumer Confidence
Wednesday: New Home Sales
Thursday: (2nd look) GDP and Durable Goods Orders
Friday: Personal Income and Spending, Core Inflation and Chicago PMI
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.