3/19/20 Market Notes
Stocks remained very volatile on Wednesday, causing the New York Stock Exchange to suspend trading for 15 minutes as ‘circuit breakers’ were triggered shortly after the opening bell rang. Although stocks ended well off their lows, rallying more than 700 points (Dow Jones Industrial Average) in the last half hour of trading, they still ended sharply lower. By the time the closing bell rang, the Dow ended down 1,338 points or 6.3%, while the S&P 500 declined 5.18% and the Nasdaq had similar losses. The small cap laden Russell 2000 index declined 10.42%, as investors bet that the economic toll on many smaller businesses might prove too much to bare. Oil prices fell 24% to roughly $20 per barrel, an 18 year low for the commodity, while bond yields around the world rose helping to push the benchmark Ten Year Treasury yield to 1.24% The recent trend of investors favoring companies with strong balance sheets and more predictable earnings continued, as Communication Services (-2.82%) and Consumer Staples (-3.08%) fared best, while Energy (-14.27%) and Financials (-8.86%) fared worst. The late day rally in stocks came after reports surfaced that the Senate had enough votes to pass the COVID-19 rescue bill, which already passed the house, the measure is expected to be signed by President Trump. Overnight, the European Central Bank announced new bond-purchasing operations (QE), and the U.S. Federal Reserve said it would continue to provide additional liquidity in Repo Markets, as well as stabilize any money market funds that are in a liquidity crunch. European and Asian bourses are down just over 1% in overnight trading, while premarket U.S. equity futures are pointing to a slightly lower open.
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.