Dow rebounded 303 (below earlier highs), advancers over decliners about 3-1 & NAZ shot up 126 The MLP index was only fractionally higher in the very depressed 183s & the REIT index recovered 3+ to the 421s. Junk bond funds went up along with stocks & Treasuries were sold after their recent rally. Oil rose, going over 50, & gold fell 11 to 1638.
AMJ (Alerian MLP Index tracking fund)
Equities ticked upward following a 2-day coronoavirus-fueled selloff that wiped out $1.7T of shareholder wealth. All 3 of the major averages held modest gains, with the S&P 500 recouping some of the damage done from its worst 2-day selloff since Aug 2015. The coronavirus outbreak has sickened 80K worldwide & killed 2700, according to the latest World Health Organization data. Commodities were weaker, with West Texas Intermediate crude oil down 1.4% at $49.20 a barrel & gold off 0.2% at $1646 an ounce. Treasuries fell, causing the yield on the 10-year note to climb by 3 basis points to 1.36%. The yield reached a record low yesterday. In Europe, Germany's DAX fell 0.7%, while Britain's FTSE & France's CAC were both lower by 0.5%. Asian markets were lower across the board, with China's Shanghai Composite & Japan's Nikkei both shedding 0.9% & Hong Kong's Hang Seng losing 0.8%.
US new home sales surge to 12.5-year high in January
The 10-year Treasury yield climbed, after sinking to an all-time low as investors sought the safety of US gov debt amid heightened fears about the fast-spreading coronavirus. The yield on the benchmark 10-year Treasury, which moves inversely to price, rose 3 basis points to 1.359%, while the yield on the 30-year Treasury bond was higher at 1.843%. The 10-year yield fell to a record low yesterday as concerns about the global economic impact of the coronavirus sent investors running for safety. The S&P 500 posted back-to-back losses of more than 3%, suffering its biggest 2-day plunge since 2015. The Centers for Disease Control & Prevention has warned Americans to prepare for the virus to arrive stateside, suggesting a pandemic is inevitable. New coronavirus cases have emerged across Europe, most recently in Austria, Switzerland & Spain, while the virus spread south in Italy to take the country's death toll to 11, with new cases surpassing 320. The 2-year yield, however, hit a low of 1.157% today, its lowest level since Feb 2017. The short-duration rate is the most sensitive to Federal Reserve's monetary policy expectations. Traders have increasingly priced in a rate reduction at the central bank’s Apr meeting. The fed funds futures market is assigning a near 60% chance of a rate cut at the Fed's Apr policy meeting & traders see the possibility of 3 cuts in 2020.
10-year Treasury yield bounces from record lows
Lowe's (LOW) predicted lower profit this year than was expected after disappointing same-store sales at the end of 2019. EPS will be as much as $6.65, compared with the $6.67 that had been expected. Same-store sales rose 2.5% in the 3 months thru Jan, missing the 3.6% that was expected. Companywide, EPS was 66¢, as revenue rose 2.4% to $16.03B. Adjusted EPS was 94¢ a share, exceeding the 91¢ that was anticipated. “We delivered profitability that exceeded our expectations given strong expense management, improving gross margin and enhanced process execution,” CEO Marvin Ellison said. “Our sales growth was driven almost entirely by our U.S. brick and mortar stores, supported by our investments in technology, store environment and the Pro business.” The stock fell 3.33.
If you would like to learn more about LOW, click on this link:
club.ino.com/trend/analysis/stock/LOW?a_aid=CD3289&a_bid=6ae5b6f7
All considered, this relief rally is hardly bringing much relief to investors. Coronavirus fears have not gone away & Trump will give an address this evening, providing more information about the challenges that we all face. The Volatility Index (VIX) fell 2+ to 25, remaining pretty much double the values during the "good old days." Investors are nervous & are not taking this rebound seriously. In the latest trading, Dow has fallen over 100 from its earlier high.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 50.09 | +0.19 | +0.4% |
| GC=F | Gold | 1,638.60 | -11.40 | -0.7% |
Equities ticked upward following a 2-day coronoavirus-fueled selloff that wiped out $1.7T of shareholder wealth. All 3 of the major averages held modest gains, with the S&P 500 recouping some of the damage done from its worst 2-day selloff since Aug 2015. The coronavirus outbreak has sickened 80K worldwide & killed 2700, according to the latest World Health Organization data. Commodities were weaker, with West Texas Intermediate crude oil down 1.4% at $49.20 a barrel & gold off 0.2% at $1646 an ounce. Treasuries fell, causing the yield on the 10-year note to climb by 3 basis points to 1.36%. The yield reached a record low yesterday. In Europe, Germany's DAX fell 0.7%, while Britain's FTSE & France's CAC were both lower by 0.5%. Asian markets were lower across the board, with China's Shanghai Composite & Japan's Nikkei both shedding 0.9% & Hong Kong's Hang Seng losing 0.8%.
Stocks surging after virus-fueled selloff wipes out $1.7T of shareholder wealth
Sales of new US single-family homes raced to a
12½-year high in Jan, pointing to housing market strength that
could help to blunt any hit on the economy from the coronavirus & keep
the longest economic expansion in history on track. The Commerce
Dept said new home sales jumped 7.9% to a seasonally
adjusted annual rate of 764K units last month, the highest level
since 2007. Dec's
sales pace was revised up to 708K units from the previously reported
694K units. The forecast called for new home
sales, which account for about 12.3% of housing market sales, would
advance 3.5% to a pace of 710K units in Jan. New home sales
are drawn from permits & tend to be volatile on a month-to-month
basis. Sales surged 18.6% from a year ago. Financial markets have been rattled in
recent days by fears that the coronavirus, which has killed more than
2K, mostly in China, & spread to other countries, would
undercut global and US economic growth. The epidemic is seen
disrupting supply chains for manufacturers, & hurting the travel &
tourism industries. Data firm IHS Markit said last Fri its
flash Composite PMI Output Index, which tracks the US manufacturing & services sectors, contracted to a 76-month low in Feb. Though housing accounts for a small share of GDP, it has a giant foot print on the economy. The sector, which accounts for about 3.1% of GDP, is
being supported by cheaper mortgage rates after the Federal Reserve cut
interest rates 3 times last year. Reports this month showed
permits for the future construction of single-family homes jumped in
Jan to the highest since 2007 & the stock of homes under
construction in January was the highest since 2007. That
could help to ease a shortage of homes that has constrained sales. The
median new house price surged 14.0% to a record $348K in Jan from
a year ago. Sales last month were concentrated in the $200-749K
price range. New homes priced below $200K, the most sought after,
accounted for less than 10% of sales. There were 324K new homes
on the market in Jan, up 0.3% from Dec. At Jan's sales
pace it would take 5.1 months to clear the supply of houses on the
market, down from 5.5 months in Dec.
US new home sales surge to 12.5-year high in January
The 10-year Treasury yield climbed, after sinking to an all-time low as investors sought the safety of US gov debt amid heightened fears about the fast-spreading coronavirus. The yield on the benchmark 10-year Treasury, which moves inversely to price, rose 3 basis points to 1.359%, while the yield on the 30-year Treasury bond was higher at 1.843%. The 10-year yield fell to a record low yesterday as concerns about the global economic impact of the coronavirus sent investors running for safety. The S&P 500 posted back-to-back losses of more than 3%, suffering its biggest 2-day plunge since 2015. The Centers for Disease Control & Prevention has warned Americans to prepare for the virus to arrive stateside, suggesting a pandemic is inevitable. New coronavirus cases have emerged across Europe, most recently in Austria, Switzerland & Spain, while the virus spread south in Italy to take the country's death toll to 11, with new cases surpassing 320. The 2-year yield, however, hit a low of 1.157% today, its lowest level since Feb 2017. The short-duration rate is the most sensitive to Federal Reserve's monetary policy expectations. Traders have increasingly priced in a rate reduction at the central bank’s Apr meeting. The fed funds futures market is assigning a near 60% chance of a rate cut at the Fed's Apr policy meeting & traders see the possibility of 3 cuts in 2020.
10-year Treasury yield bounces from record lows
Lowe's (LOW) predicted lower profit this year than was expected after disappointing same-store sales at the end of 2019. EPS will be as much as $6.65, compared with the $6.67 that had been expected. Same-store sales rose 2.5% in the 3 months thru Jan, missing the 3.6% that was expected. Companywide, EPS was 66¢, as revenue rose 2.4% to $16.03B. Adjusted EPS was 94¢ a share, exceeding the 91¢ that was anticipated. “We delivered profitability that exceeded our expectations given strong expense management, improving gross margin and enhanced process execution,” CEO Marvin Ellison said. “Our sales growth was driven almost entirely by our U.S. brick and mortar stores, supported by our investments in technology, store environment and the Pro business.” The stock fell 3.33.
If you would like to learn more about LOW, click on this link:
club.ino.com/trend/analysis/stock/LOW?a_aid=CD3289&a_bid=6ae5b6f7
Lowe's slashes profit forecasts amid slumping sales
All considered, this relief rally is hardly bringing much relief to investors. Coronavirus fears have not gone away & Trump will give an address this evening, providing more information about the challenges that we all face. The Volatility Index (VIX) fell 2+ to 25, remaining pretty much double the values during the "good old days." Investors are nervous & are not taking this rebound seriously. In the latest trading, Dow has fallen over 100 from its earlier high.
Dow Jones Industrials
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