Afternoon Note
Long time concerns and anxieties came to a boil over the weekend and there were several flashpoints.
• Coronavirus concerns
In America, cases spread across the nation, and states declare emergencies.
Italy quarantining Lombardy region, essentially putting close to 17 million people on lockdown.
China exports collapse in January and February as supply chain disruptions cripple exports.
• Crude Oil War
After failing to convince Russia to cut production, Saudi Arabia does an about face, announcing it will increase its own production north to 10 million barrels, but possibly 12 million, a day flooding an already saturated global market.
The initial move saw crude oil off 30%.
• Bond Yields
The U.S. ten year crashed below 0.50%, and now there is concern we could join western nations with negative yields:
• Stock markets
Major stock market routs around the world before the U.S. market opened sparked enough selling for circuit breakers to limit the pre-open downside in the U.S. Those circuit breakers were tripped again once trading officially got under way when the S&P 500 hit down 7%.
We’re taking our cues from Europe, where equity markets closed down huge (see below), but world markets want to take cues from the United States.
Voice of Reason
Lloyd Blankfein, former CEO of Goldman Sachs, has chimed in on the market selloff via Twitter. Not one to shy away from controversy, I think his tweet is a great public service announcement.
Lloyd Blankfein @lloydblankfein Fear can take mkt lower, but expect quick recovery when health threat recedes. Esp. in US, underlying economy strong, banks well-capped, and system not too leveraged. Unlike ‘08, will avoid systemic damage that cud take years to work thru. Obviously, not ignoring tragic human toll.... |
Major equity indices are off the lows of the session, but there isn’t a lot of movement off the sidelines. This kind of set up has resulted in more selling into the close, except for the last two Fridays. Of course, there is a sense of greater and smarter coordinated efforts by central banks and national governments.
On the upside, a rally north of 2,840 could attract bottom fishers.
S&P 500
Comments |
Charles--keep up the great work! S&P 500 basically at 2750 mark! Hold baby hold!! Brian C on 3/9/2020 6:03:06 PM |
Hold Baby Hold!
PS: if it fails could get to 2.440 fast then I really back up the truck. CP Charles Payne on 3/9/2020 8:29:21 PM |
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