Thursday's Market Recap - An Uptick In Covid-19 Cases In Europe & The US Sends Stocks Lower.
What is The Premarket Telling Us?
7:00 AM.
US stock futures are flashing a sea of red at this hour, indicating a significantly lower market at the open. Dow futures are down 276 points, Nasdaq futures down 156 points, and S&P futures down 34 points. Investors are responding to tick up in Covid-19 infection mostly in Europe and leading to increased restrictions by the governments in the UK, France, and Spain. There is also an uptick of cases here in the US as well, as thirty states are experiencing a troubling rise in infections.
On The Bond Desk:
The US 10 Year Bond Yield sits at 0.72%, down 0.01%.
Currency Desk:
Euro dollar: 1.17
UK Pound: 1.30
Crude Oil:
WTI crude oil futures at $40.01/barrel, down 2.27%.
On the Earnings Calendar:
Morgan Stanley reported solid Q3 earnings performance, thanks to strong trading results, just like Goldman Sachs did yesterday.
In M&A News:
None to report.
Major Asian markets sold-off in their sessions overnight. Japan (Nikkei 225) lost 0.51%, Shanghai fell 0.26%, Hong Kong (Hang Seng) fell 2.06%.
Major European markets recorded solid losses in their sessions. German (DAX) down 2.49%, France CAC 40 down 2.11%, London FTSE 100 fell 1.73%.
Market And Sector Dynamics
Markets fell decidedly lower at the start of trading. The Dow lost 319 points, Nasdaq lost 162 points, and S&P fell 42 points. A steady uptick of Covid-19 infections in the United Kingdom (UK) and in other parts of Europe forcing authorities to impose new restrictions. A similar uptick in infections is also taking place in the US, which is a worry for investors. Further adding to investors worry was this morning's Jobless Claims report showing 898K new claims for unemployment, versus the 825 consensus estimate.
On the other side of the ledger, a strong Q3 earnings report from Morgan Stanley is adding some positive sentiment to the markets.
Markets gradually improved throughout today's session, eventually getting back close to the flat line shortly before the closing bell. Investors are now convinced that there will be no additional stimulus before the November 3 elections, which was the main catalyst pushing markets higher in the last few weeks.
Trading was fairly balanced in today's session. Six of the eleven S&P sectors closed the session with modest gains, led by Energy, Financials, Real Estate, Industrials, Consumer Discretionary, and Consumer Staples. Healthcare, Communication Services, Technology, Basic Materials, and Utilities were modestly lower today.
Factors Influencing Today's Market
Rising Covid-19 infection in Europe and here in the US dampened investor enthusiasm.
Asian and European markets traded lower in today's session.
Morgan Stanley reported strong Q3 earnings results.
This week's Jobless Claims report shows other 898K Americans filed for new unemployment benefits.
US 10 Year Bond Yield closed today at 0.739%, up 1.61%.
WTI crude oil closed today at $40.95/barrel, down 0.22%.
This week's EIA status report shows US crude oil inventories fell/draw -3.8 million barrels.
Market Close Volume Traded And Advance Decline Ratio
Stocks finished the day lower today, with the Dow down 19.80 points, Nasdaq lost 54.86 points, and S&P fell 5.33 points. Total NYSE volume traded, a light 3.73 billion shares. Advancing shares outpaced Declining shares by 1.29:1.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance. Wall Street Journal - Market Diary.
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