Monday's Market Recap - Add Oil Shock To The Coronavirus, A Deadly Mixture.
What is The Premarket Telling Us?
7:00 AM.
US stock futures started off ugly overnight, and continues to be so at this hour. Dow futures are down 1,255 points, Nasdaq futures down 410 points, and S&P futures down 145 points. Drastic actions in Milan, Italy to contain the spread of coronavirus is sending fear across the globe, including right here in the US. A cruise ship off the coast of California, with over 3500 passengers on board, is reported to have 19 crewmen and 2 passengers who tested positive for coronavirus. That ship is supposed to dock at the Port of Oakland sometime today.
On The Bond Desk:
The US 10 Year Bond Yield at 0.71%, down 0.21%.
Currency Desk:
Euro dollar: 1.12
UK Pound: 1.30
Crude Oil:
WTI crude oil futures at $32.51/barrel, down 21.51%, as the Saudi and Russia disagree on production cuts.
On the Earnings Calendar:
None.
In M&A News:
Twitter and Elliot Management has come to a agreement.
What About The Asian And European Markets?
Major Asian markets shot lower overnight. Japan (Nikkei 225) plunged 5.07%, Shanghai sank 3.01%, Hong Kong (Hang Seng) tanked 4.23%.
Major European markets tumbled today, German (DAX) down 7.94%, France CAC 40 down 8.39%, London FTSE 100 down 7.69%
Market And Sector Dynamics
Markets tumbled at the open. The Dow sank 1800 points, Nasdaq sank 615 points, and the S&P dived 188 points, as the world confronts the spread of the coronavirus. In Italy, the authorities have closed down the Lombardy region, including Milan, one of its main economic hubs. Adding more fuel to the fire, Saudi Arabia and Russia are at war over oil production cuts. Crude oil prices are down early, at $32.44/barrel, down 21.44%.
Also pressuring the markets is the continuing collapse of the US 10 Year Bond Yield, which fell intraday to 0.31%, before returning to 0.441% by mid-morning.
Stocks continued to fall after the open. By 9:34 AM, the S&P fell 7%, triggering the New York Stock Exchange circuit breakers, halting all trading for 15 minutes. After the halt the S&P was contained, while the Dow was down more than 2000 points, later backing off that low. Intraday this was the largest point drop, and the worst trading day since the 2008 downturn.
As expected today's selloff was off the charts, and negative, with all eleven S&P sectors ending in negative territory, led by Energy, Financials, Basic Materials, Industrials, Technology, Real Estate, Communication Services, and Consumer Discretionary.
Factors Influencing Today's Market
Russia and Saudi Arabia has started a oil price war, sending crude and energy prices lower.
Coronavirus continues to spread, with a closing down of Italy's Lombardy region, including Milan.
Twitter, and Elliot Management have come to an agreement. Elliot gets 2 board seats, initiation of a buyback program, and Jack Dorsey remains.
WTI Crude Oil closed at $31.13/barrel, down 24.59%, a devastating haircut.
US 10 Year Bond Yield closed at 0.559%, up 11.24%.
Market Close Volume Traded And Advance Decline Ratio
When the markets closed, the Dow plunged 2013.76 points, the largest point drop in history, Nasdaq plunged 624.94 points, and the S&P tumbled 225.81 points. Total NYSE volume traded, a heavy 8.35 billion shares. Declining shares outpaced Advancing shares 42:1.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance.
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