2/6/20 Market Notes
Including Wednesday’s 483 point gain, the first three trading days of February have brought investors a 1,034 point gain in the Dow Jones Industrial Average. The S&P 500 matches that venerable large cap indexes 3 ½% return, while the NASDAQ has risen over 4% in that period. The rapid rebound from last week’s sell-off is a clear example to investors that market sentiment can turn quickly and consequently avoiding market timing or overreacting to short-term news can prove detrimental to long-term returns. Two factors are cited in yesterday’s sharp rally, the potential discovery of a vaccine against the coronavirus, and the much better than expected January private payroll numbers (according to the ADP report). The Real Estate was the sole sector to decline yesterday, as the Energy sector rose more than 3% on the back of a strong rebound in oil prices, and the Healthcare and Financial sectors both gained about 2%. The benchmark Ten Year Treasury Yield rose above 1.65%, while the U.S. dollar strengthened and oil prices gained more than 2%.
On the international front, both European and Asian bourses are up more than 1% on average, with the Japanese Nikkei index gaining more than 2% and Chinese stocks rising more than 3% after a multi-week selloff. Premarket U.S. equity futures are pointing to a fourth consecutive day of gains, rising in early trading ahead of key economic data and earnings reports.
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.