Wednesday's Market Recap - Dow Drops 700 Points Due To Spike In Covid Cases.
What is The Premarket Telling Us?
7:00 AM.
This morning's market set up is pointing negative. US stock futures are solidly lower at this hour. Dow futures down 236 points, Nasdaq futures down 49 points, and S&P down 25 points. Asian markets were mildly lower overnight.
On The Bond Desk:
The US 10 Year Bond Yield at 0.71%, up 0.01%
Currency Desk:
Euro dollar: 1.13
UK Pound: 1.25
Crude Oil:
WTI crude oil futures at $39.60/barrel, down 1.91%.
On the Earnings Calendar:
None.
In M&A News:
None.
What About The Asian And European Markets?
Major Asian markets were modestly lower. Japan (Nikkei 225) down 0.07%, Shanghai up 0.30%, Hong Kong (Hang Seng) up 0.50%.
Major European markets lost significant ground today. German (DAX) down 3.43%, France CAC 40 down 2.92%, London FTSE 100 down 3.11%.
Market And Sector Dynamics
Stocks opened the session convincingly lower. The Dow lost 228 points, Nasdaq lost 35 points, and the S&P fell 21 points. Investors perceive the glass as half empty in this session, as Covid-19 infections across the US has jumped to new heights, in the south and west of the country, causing great concern for hospitals, healthcare providers, and businesses. Also worrying for investors, is new talk of the US placing tariffs on products from the European Union, as well as the EU may impose travel bans on visitors from some countries including the US.
Market sank lower in the morning, after the Governors of New York, New Jersey and Connecticut, collectively decided to quarantine visitors from Covid-19 hot spots such as Arizona, Florida, and Texas. That decision sent the Dow down more than 850 points shortly before noon.
All eleven S&P sector traded lower early in the session, with Banks, financials shares, energy and industrials bearing the brunt of the losses. Stocks recovered a small fraction of the morning's losses, and held on to those levels for the rest of the session.
The selloff was broad based and negative, with all eleven ending the the session with heavy losses, led by Energy, Financials, Industrials, Basic Materials, Real Estate, Healthcare, Communication Services, Technology, Consumer Discretionary, Consumer Staples, and Utilities.
Factors Influencing Today's Market
Today, investors chose to focus on the worrying spike in Covid-19 infections in the US.
The Administration may be considering tariffs on products coming from the European Union, while the EU is also considering restricting travel from Covid-19 hot spot countries including the US.
New York, New Jersey, and Connecticut have collectively initiated a 14 day quarantine requirement for travelers from the state of Arizona, Florida, & Texas, due to new outbreaks of coronavirus in those states.
Health store, GNC has filed for Chapter 11 Bankruptcy protection today. The company is also closing 1200 stores, nationwide.
The IMF has further reduced its 2021 GDP growth forecast from down 5.9%, to down 8.0%.
The US 10 Year Bond Yield closed lower at 0.679%, down 5.05%.
WTI crude oil closed today at $38.01/barrel, down 5.85%.
This week's EIA Petroleum Status Report showed US crude oil inventories grew/build 1.4 million barrels, versus 1.2 million barrels for the prior week.
Market Close Volume Traded And Advance Decline Ratio
Stocks fell hard today, the worst trading session since June 11th. The Dow tanked 710.16 points, Nasdaq fell 222.20 points, and S&P lost 80.96 points. Total NYSE volume traded, a moderate 5.63 billion shares. Declining shares outpaced Advancing shares by 7.53:1.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance.
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