2/27/20 Market Notes
After initially climbing 461 points, the Dow Jones Industrial Average and other major stock indexes reversed course to end lower for the fourth consecutive day. By the time the closing bell rang, the Dow lost another 121 points (0.45%), while the S&P 500 dropped 0.27% and the NASDAQ eked out a 0.17% gain on the back of strong performance in the technology sector. Amongst the sectors of the S&P, energy fared worst, falling nearly 3%, while the Technology sector was the sole gainer with a 0.40% rise. The benchmark Ten Year Treasury Yield touched an all-time low of 1.30%, and oil prices fell another 2 ½% as fears of the coronavirus turning into a pandemic spread. The U.S. dollar was mixed, and gold was effectively unchanged. Economic news was solid on Wednesday, as New Home Sales were reported to have risen by 7.9% in January, a 12 ½ year high and much better than economists had forecast. None-the-less, concerns over the impact of the coronavirus permeated through the market, particularly impacting the small cap Russell 2000 index, which declined 1.22%. One major concern is that the supply chain disruptions will disproportionately impact small businesses, which may not have the where with all to withstand a prolonged economic downturn. Looking ahead, investors are likely to pay close attention to today’s economic data releases, including a revision to fourth quarter GDP data, Durable Goods Orders, and Pending Home Sales data. Tomorrow’s Chicago PMI, February Consumer Sentiment and Inflation data releases are also likely to be pertinent to market participants. European bourse are sharply lower in overnight trading, falling nearly 3% across the board, while their Asian counterparts are only off by a fraction. U.S. premarket equity futures are pointing to a significantly lower open, as investors are expressing little confidence in the U.S.s preparedness in the event of a rapidly spreading virus.
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.