Wednesday's Market Recap - Dow Down Triple Digits As Volatility, Generated By Rising Yields Take
What is The Premarket Telling Us?
7:00 AM.
US stock future are pointing lower this morning. Dow futures are down 59 points, Nasdaq futures down 4.50 points, and the S&P futures down 5.25 points. Investors are anticipating the minutes of the Fed's January meeting, to gain any available information about interest rates. One of the reasons for the selloff, in the last few weeks, is that, investors have been concerned about, multiple compression, in the face of a rising interest rate environment.
On The Bond Desk:
The US 10 year bond yield at: 2.89% , up 0.01% or one basis point.
Currency Desk:
Euro dollar at 1.23
UK Pound at 1.39
Crude Oil:
WTI crude oil futures at $61.32/barrel, up 0.76%
On the Earnings Calendar:
In M&A News:
Broadcom has reduced the amount of its proposed deal for Qualcomm, in respose to Qualcomm's higher bit for NXP yesterday. The drama continues.
What About The Asian And European Markets?
Major Asian markets were higher. Japan (Nikkei 225) up 0.21%, Shanghai closed, Hong Kong (Hang Seng) up 1.81%
European markets were mixed in their session. Germany (DAX) down 0.14%, France CAC 40 up 0.23%, London FTSE 100 up 0.
48%.
Market And Sector Dynamics
Markets opened modestly higher, with the Dow up 21 points, Nasdaq up 24 points, and the S&P rose 4 points. This is much better than the futures were predicting early in the premarket.
By 9:40 AM. the Dow was positive up triple digits 102 points, Nasdaq up 24 points, and S&P up 12 points, led mostly by technology/FAANG stocks.
Stocks remained at those elevated levels, with the Dow up 159 points, just before the of the Fed's January meeting minutes. Stocks soared higher after the release as investors, at first glance interpreted the minutes as dovish. At the high, the Dow was up well over 300 points, shortly after 2:00 PM.
Unfortunately, stocks sold off in the last hour of trading, as the US 10 year yield spiked, and investors were reminded that, the January meeting took place prior to the passing of the new tax bill, and the, new interest rate fears, that caused the recent market correction.
Stocks closed at the low of the day, in another volatile session. All eleven S&P sectors closing the day with losses. Utilities, telecommunications services, energy, basic materials, and technology, were the main laggards.
Factors Influencing Today's Market
US 10 year bond yield closed the day at 2.943%. Today's intraday range 2.877% - 2.943%.
The VIX volatility index closed at 20.02. Today's intraday range 16.97 - 21.04
Crude oil was lower in today's session. WTI crude oil closed at $61.24/barrel, down 1.07%.
Report that Amazon has launched it own line of over the counter pharmacy goods. Shares of the drugstore retailer, such as Walgreen, CVS, and Rite Aid, traded lower in today's session.
January Existing Home Sales fell an unexpectedly 3.2%, at an annualized rate of 5.380 million units, versus 5.650 estimated.
Market Close Volume Traded And Advance Decline Ratio
When the closing bell rang, all the market indices were lower. The Dow dived 166.97 points, Nasdaq fell 16.8 points, and the S&P down 14.93 points. Total NYSE volume traded, a moderate 3.73 billion shares. Decliners outpaced Advancers, just better than even.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance.
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