U.S. benchmarks on Tuesday tried to claw back from the prior day’s ugly beating, sparked by the rising number of coronavirus cases outside of China. Home Depot’s earnings beat, along with constructive U.S. data, allowed investors to refocus momentarily on the fundamentals.
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11:30 a.m. ET: ‘What does the bond market know?’
Veteran market watcher Jim Paulsen notes the the drop in Treasury yields — with the benchmark 10-year (TNX) plummeting to a record low in volatile Tuesday — is adding to investor jitters. The coronavirus-inspired volatility also begs another crucial question, according to Paulsen:
“In the face of a solid stock market rally, bonds seemingly suggest something sinister lurks under the surface. Like much of the world’s sovereign debt, could U.S. bond yields soon turn negative?
The bond market may prove prescient and correctly signal that investors should be cautious. However, as the charts in this report illustrate, yields are increasingly diverging from several fundamental relationships, which have historically suggested they are poised to rise.
Perhaps in the coming weeks, the spread of coronavirus will push the global economy toward recession. Alternatively, should virus fears eventually ease before sustained economic damage occurs, a number of underlying fundamental forces currently suggest bond yields could be at risk of again rising before the year is over.
Note that negative yields is something President Donald Trump has been actively pushing for in the face of monetary policy that he feels is too restrictive. That said, a move to negative rates is hardly a favorable policy outcome for a number of reasons (hello, Europe) — and certainly not ideal if spurred by global recession.
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10:31 a.m. ET: Stocks pare earlier gains, major indices fall into red
All of the major indices pared earlier gains and flipped into negative territory about an hour into Tuesday’s trading session. Safe-haven buying sent the 10-year treasury yield to a record low of 1.329%, while the S&P and Dow tumbled to their lowest levels since December.
Here’s another check of the market moves, as of 10:31 a.m. ET:
S&P 500 (^GSPC): -0.79%, or down 25.53 points to 3,200.26
Dow (^DJI): -0.72%, or down 201.76 points to 27,759.04
Nasdaq (^IXIC): -0.69%, or down 57.65 points to 9,264.73
Crude oil (CL=F): -0.47%, or down $0.69 to $50.74 a barrel
Gold (GC=F): -1.19%, or down $19.90 to $1,656.70 per ounce
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10 a.m. ET: Consumer confidence ticks higher; S&P 500 seesaws
The U.S. consumer rose even as the deadly coronavirus outbreak threatened sentiment around the world. The Conference Board’s February consumer confidence index rose to 130.7 from a downwardly revised January reading of 130.4. Consensus expectations were for 132.2 in February.
Meanwhile, markets lost some steam in early trade. After opening the trading session higher by 0.58%, the broader market turned negative and seesawed between positive and negative territory.
Here’s an updated check of the markets, as of 10 a.m. ET:
S&P 500 (^GSPC): +0.16%, or up 5.05 points to 3,230.94
Dow (^DJI): +0.21%, or up 58.38 points to 28,019.18
Nasdaq (^IXIC): +0.28%, or up 25.53 points to 9,246.81
Crude oil (CL=F): -0.47%, or down $0.24 to $51.19 a barrel
Gold (GC=F): -1.39%, or down $23.30 to $1,653.30 per ounce
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9:30 a.m. ET: Stocks open higher, snap a 3-day losing streak
U.S. stocks rose across the major indices and snapped a three-day losing streak following a brutal trading session Monday when the Dow plummeted 1,031.61 points. It was the worst day for the S&P 500 and Dow in two years and only the third time in history when the Dow logged a loss of more than 1,000 points. The other two instances occurred on Feb. 5 and Feb. 8, 2018.
Here were the main market moves, as of 9:30 a.m. ET:
S&P 500 (^GSPC): +0.58%, or up 18.63 points to 3,244.52
Dow (^DJI): +0.60%, or up 166.77 points to 28,127.57
Nasdaq (^IXIC): +0.93%, or up 85.65 points to 9,306.93
Crude oil (CL=F): -0.19%, or down $0.10 to $51.33 a barrel
Gold (GC=F): -1.59%, or down $26.70 to $1,649.90 per ounce
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7:30 a.m. ET: Stock futures rally after ugly Monday; HD beats
U.S. stock futures posted early gains, shaking off weakness in Asia and Europe, as investors become increasingly jittery about the possibility that the coronavirus is becoming a worldwide pandemic.
Here’s were the main moves during the pre-market session, as of 7:30 a.m. ET:
S&P 500 futures (ES=F): 3,234.25, up 8 points or 0.25%
Dow futures (YM=F): 28,037.00, up 69.00 points or +0.25%
Nasdaq futures (NQ=F): 9,137.50, up 46.50 points or 0.51%
Crude oil (CL=F): 51.29, down 0.14 points or -0.27%
Gold (GC=F): 1,648.90, down $27.70 points or -1.65%
Traders momentarily took comfort in a strong quarterly earnings report from Home Depot (HD), a consumer bellwether and a Dow (^DJI) component.
Stocks are coming off their worst day in 2 years — a rout that saw $1.7 trillion in market capitalization evaporate in a single trading session, according to veteran analyst Howard Silverblatt. On Wednesday, the Nasdaq and S&P set record highs — but since then have hemorrhaged $2.44 trillion in value, according to Silverblatt.
An unexpected surge in confirmed infections in Italy and South Korea — which now has the largest cluster of cases outside of China — is sparking widespread fear and undermining the sense of calm the World Health Organization has strived to project. On Monday, the agency said the virus was “not yet” a pandemic, but could become one.
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2020-02-25 16:57:00Z
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