Tuesday's Market Recap - Stocks Tank On Lack Of Details Of China Trade Truce, And Inverted Yield
What is The Premarket Telling Us?
7:00 AM.
The markets are indicated down this morning, after yesterday big rally. Dow futures down 124 points, Nasdaq futures down 41 points, and S&P futures down 11 points. Investor are expressing uncertainty regarding the 'so called' US China truce, reached over the weekend. Inverted bond yield has all crept up the wall of worry, as the yield of the US 3 year bond and the US 5 year bond has inverted, leaving investors to worry if a recession can be far away.
On The Bond Desk:
The US 10 Year Bond Yield at 2.99%
Currency Desk:
Euro dollar: 1.13
UK Pound: 1.28
Crude Oil:
WTI crude oil futures at $53.92/barrel, up 1.83%.
On the Earnings Calendar:
Toll Brother reported weak earning results, missing earnings and sales expectations.
In M&A News:
None
What About The Asian And European Markets?
Major Asian markets were mixed overnight. Japan (Nikkei 225) down 2.39%, Shanghai up 0.42%, Hong Kong (Hang Seng) up 0.29%
Major European markets were all lower. German (DAX) down 1.14%, France CAC 40 down 0.82%, London FTSE 100 down 0.56%.
Market And Sector Dynamics
Stocks opened the trading day lower, with the Dow down 94 points, Nasdaq down 34 points, and the S&P down 7 points. Investors are beginning to question if a deal was really reached between the Trump administration, and China's President Xi at the G20 Summit last Saturday night, after conflicting information from administration officials, including President Trump. As if that were not enough to worry about, the US 3 Year bond yield, and Year bond yields have inverted, signalling the possibility of a recession within the next eighteen months, and spooking the markets.
Stock fell precipitously at midday, with the Dow down almost 800 points, in the middle of the afternoon session, and remained at that depressed level into the close.
Today's selloff was orderly, and broad based. Ten of the eleven S&P sectors closed with solid losses, led by Financials, Industrials, Consumer Discretionary, Technology, Communication Services, Basic Materials, Energy, and Healthcare.
Factors Influencing Today's Market
Investors seriously questioning the voracity of the Administration's claim of a trade truce with China.
Weak Earning report from Toll Brothers, led to further weakness in the housing sector.
Inversion of the US 3 Year and 5 Year bond yields, signaling recession fears.
Crude oil rose modestly today. WTI crude oil price close at $53.25/barrel, up 0.57%.
Market Close Volume Traded And Advance Decline Ratio
At the end of trading all the indices tanked. The Dow dived 799.36 points, Nasdaq sank 283.09 points, and the S&P fell 90.31 points. Total NYSE volume traded, a moderate 4.42 billion shares. Declining shares outpaced Advancing shares better than 5.1.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance.
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