Afternoon Note
WOW. Hope you were wearing a neck brace to keep from getting whiplash from the market swings today. At one point, the Dow was down 960 points, and while still down 1.3%, it has made over a 600-point reversal. The Dow has gone from reaching an all time high to correction mode in 10 trading session. The Dow, Nasdaq and S&P 500 all hit correction mode (down 10% from the high), but since the Nasdaq and S&P500 have recovered a bit.
Momentum names have been hit hard. The love hate relationship with Tesla (TSLA) is in full gear, and the stock is down 21% in one week, and 7.5% today. But selling has been widespread, and all the S&P 500 sectors are still in the red.
S&P 500 Index |
-1.07% |
Communication Services (XLC) |
-0.87% |
Consumer Discretionary (XLY) |
-0.26% |
Consumer Staples (XLP) |
-1.04% |
Energy (XLE) |
-1.36% |
Financials (XLF) |
-0.88% |
Health Care (XLV) |
-0.08% |
Industrials (XLI) |
-0.21% |
Materials (XLB) |
-0.89% |
Real Estate (XLRE) |
-2.05% |
Technology (XLK) |
-1.56% |
Utilities (XLU) |
-0.68% |
Decliners are slightly outpacing advancers on both issues and volume, and new lows are blowing away new highs.
Issues: |
NYSE |
NASDAQ |
Advancing |
933 |
1,056 |
Declining |
2,038 |
2,156 |
52 Week High |
17 |
52 |
52 Week Low |
668 |
510 |
Advancing |
1.04B |
1.03B |
Declining |
2.53B |
1.49B |
While the global fears of coronavirus have led to these wild swings and downward pressure, the change in U.S. Treasuries helped fend off further excessive selling. The benchmark 10-year yield has turned positive, and with that the selling in equites reversed. The 10-year is now 1.32% after touching 1.25% at its low. The 2-year yield, while still down 3 basis points to 1.12%, is off its low of 1.05%.
Mortgage rates dropped to the lowest level since October 2016, with the 30-year fixed-rate mortgage averaging 3.45% during the week ending February 27, a decrease of four basis points from the prior week. The 30-year fixed-rate mortgage hit its all-time low back in November 2012, when the average rated dropped to 3.31%. The 15-year fixed-rate mortgage also declined four basis points to 2.95%.
Low rates are helping drive home buyers. This morning, we got the latest read on Pending Home Sales, contracts signed but not closed, which were up 5.2%, heftily topping the estimates of an increase 2%. Annually, pending home sales are up 5.7%.
Initial claims, the number of people who applied for U.S. unemployment benefits, rose by 8,000 to a one-month high of 219,000, versus expectations of 214,000 for the week ending February 22, 2020. The previous week was revised higher by 1,000 to 211,000. The 4-week moving average, a better gauge, inched up by 500 to 209,750, while the prior week was revised up by 250 to 209,250. Continuing claims fell by 9,000 to 1.72 million.
Comments |
I figure to drop Sp 5 and go with you guys. I'm new to this crazy market. Matt on 2/27/2020 6:19:03 PM |
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