Talk about wild ride.  The futures were up before the G7 statement, then turned down after the statement, and then bumped around till our Fed announced a 50-basis point emergency rate cut.  The markets rocketed higher, but it was short lived. 

Fed Chair Powell gave a press conference, stating it will do its part and is prepared “to use all tools available and act appropriately.”  Despite Powell saying the Fed will continue to do its part to keep the economy strong, it did not assuage investor fears nor the naysayers that said that the timing of the cut was misplaced or that the coronavirus must be worse that telegraphed.  It could simply just be a case of sell on the news coupled with the run-up yesterday.

The rate cut has already been seen in interest rates and the U.S. dollar, which is lower.  The 2-yr yield is down to 0.76%, the 10-yr note yield to 1.05% (it hit 1.16% overnight), a record low, and the 30 year is at 1.65%.

At midday, the Dow is down 1.61% to 26,260, the S&P 500 -1.37% to 3,046 and the Nasdaq - 1.33% to 8,833.  The downside test for the markets are the lows from last Monday and Friday.  

Key Downside Tests	Monday Feb 24	Friday Feb 28
S&P 500	2,945	2.855
Dow Jones Industrial Average	25,391	24,681
NASDAQ Composite	8,543	8,264

Six of 11 S&P 500 sectors are in correction mode.  Financials are the hardest hit today on the back of the rate cut. 

S&P 500 Index		-0.74%
Communication Services (XLC)		-0.44%
Consumer Discretionary (XLY)		-0.05%
Consumer Staples (XLP)	+0.61%
Energy (XLE)		-0.77%
Financials (XLF)		-1.84%
Health Care (XLV)		-0.53%
Industrials (XLI)	+0.19%
Materials (XLB)	+0.96%
Real Estate (XLRE)	+1.53
Technology (XLK)		-0.79%
Utilities (XLU)	+1.25%

Despite all this, advancers are leading decliners, with breadth mixed.

Issues:	NYSE	NASDAQ
Advancing	1,792	1,558
Declining	1,144	1,584
52 Week High	21	66
52 Week Low	59	63
Advancing	1.10B	982.50M
Declining	1.48B	966.19M

Emotions

With all this volatility and uncertainty, I asked where should investor emotions be right now?  Here is some of the twitter responses I received. https://twitter.com/cvpayne/status/1234535389957906433

What you’re your thoughts?

paddy Medium starMedium

• Investors should not be swayed by emotions 

WaynesWorld55

• Buy, buy, buy! No joke 

Cookie G

• Keep calm and trade on

Carrie Legrin

• Keep calm , carry on. This virus is not the end of the world. They will lose more by panicking.

 G Finn

• I’m optimistic. And everything’s on sale!!!

 Janna Crickmore

• Your optimism last week kept us centered

 Supreme Bashar Teg

• Investors should be as unemotional as possible. It’s unrealistic to expect complete detachment, but ruthlessly analytical strikes me as the correct approach (always). Kipling’s advice fits here: “If you can keep your head when all about you are losing theirs...”

Racheal #LuckeyAce

• BUY! BUY! BUY!

 Jamie Pratique

• Looking for bargains; cautiously optimistic.

 OldSoldier21

• People who use emotions in lieu of facts, logic, and empirical data are soon to be parted with their money/investments.

Kevin

• Hope and thoughtfulness. We have an opportunity to readjust supply chains in such a way as to diminish the influence if China.

 

Comments

panic is not an investment strategy...…..invest in quality companies diversify and have a long term perspective...……. tony condeni on 3/3/2020 1:20:35 PM

Be diligent and look for bargains! Mike on 3/3/2020 1:34:09 PM

I'm still waiting for the chaos Y2K will bring. E. V. Wagoner on 3/3/2020 1:47:40 PM

Investors know a rate cut cannot mitigate lost productivity. Ernie Moyer on 3/3/2020 1:48:22 PM

Hope stage. May or may not be past the worst, but see more upside than downside with this economy. ict optimist on 3/3/2020 1:54:36 PM

Stay the course. We have no control over what the world doe's, only what we do. Michael on 3/3/2020 2:28:08 PM

Find opportunities and take them! Jay Wade on 3/4/2020 11:14:56 AM

Optimism... bumps in the road are just part of the ride. Gary Burger on 3/10/2020 11:55:55 AM

Rebound -Optimism John Schuchman on 3/20/2020 2:05:38 PM

Amen Charles Payne on 3/20/2020 2:08:03 PM

Investors should look at this cautious optimism. It's a buying opportunity. We may have more pain; but as the market has always demonstrated it's times these that big money is earned. Be brave, soldier on, and buy. Patrick Howell on 3/24/2020 3:58:28 PM

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