6/11/20 Market Notes
Stocks declined on Wednesday with the S&P 500 falling 0.5%. Breadth was decidedly negative with only 100 stocks rising and more than 400 declining. A dire global economic forecast from the OECD and a negative outlook from Fed officials set the tone on the day. The most directly affected industries, those that led the recent furious rally, fell the most. On the positive side, investors returned their attention to high quality, high growth companies and the Nasdaq turned in a gain +0.67% setting a new high for the third straight day. Treasury prices gained, pushing the yield on the Ten-year Note down to 0.75%, while the Dollar index continued its recent decline, and the Bloomberg spot gold price increased by $23/ounce (1.3%). Information Technology (+1.69%) was the only S&P sector to rise, while Real Estate (-1.91%), Industrials (-2.38%), Financials (-3.75%) and Energy (-4.92%) led the decliners. The Federal Reserve left rates unchanged, as widely expected, after the two-day FOMC meeting. In its published statement the Fed noted that the Covid pandemic has induced sharp declines in economic activity and steep job losses, posing considerable risks to short and medium term growth, while also acknowledging that conditions are currently improving. The Fed also released updated economic projections, estimating a 6.5% GDP decline in 2020 and growth of 5% estimated for 2021. The last estimate, in December, called for 2% growth in 2020. In comments after the meeting Chairman Powell reiterated guidance that accommodative policies will remain in place as long as necessary for the economy to recover and to achieve Fed goals. Investors will be taking a very close look at this morning's unemployment report, seeking signs supporting Mays unexpectedly positive employment data released last Week. Overseas markets are down along with US futures in response to concerns of a developing second-wave of virus cases in states that reopened earliest.
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.