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By Charles Payne, CEO & Principal Analyst
3/3/2020 12:59 PM

Question of the Week

Where should investors emotions be right now?
Rally
-Optimism
-Enthusiasm
-exuberance

Peak
-Euphoria
-Anxiety

Decline
-Denial
-Fear
-Despair
-Panic
-Capitulation

Bottom
-Discouragement
-Dismay

Rebound
-Hope
-Relief
-Optimism

Post your answer below.

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

WaynesWorld55

Cookie G

Carrie Legrin

 G Finn

 Janna Crickmore

 Supreme Bashar Teg

Racheal #LuckeyAce

 Jamie Pratique

 OldSoldier21

Kevin

 


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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