Sector Investing

[ReturntoSender]

Stocks close higher in volatile session, oil prices rebound
19-Mar-20 16:20 ET
Dow +188.27 at 20087.25, Nasdaq +160.73 at 7149.93, S&P +11.29 at 2409.39

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The S&P 500 advanced 0.5% on Thursday in a volatile session that saw the benchmark index fall as much as 3.3% in early action and gain as much as 2.9% in the afternoon. The Dow Jones Industrial Average rose 1.0%, while the Nasdaq Composite (+2.3%) and Russell 2000 (+6.8%) were the big movers today amid strong gains in technology and small-cap stocks.

The news cycle wasn't entirely positive with the number of COVID-19 cases continuing to surge globally, leading more companies to withdraw guidance, suspend dividends, and temporarily lay off workers. The latter started to be quantified in the weekly initial claims, which increased by 70,000 to 281,000 (Briefing.com consensus 220,000) for the week ending March 14.

To mitigate the negative impact of the coronavirus, central banks continued to amplify stimulus efforts, Congress continued to deliberate the proposed $1.3 trillion fiscal stimulus package, and clinical trials for new therapies remained in progress, according to President Trump.

The latest central bank moves included the Fed establishing a Money Market Mutual Fund Liquidity Facility (MMLF), the ECB and Bank of Japan announcing emergency bond-buying programs, and the Bank of England issuing a surprise rate cut and raising its daily asset purchases. Although not market-moving, there was an appreciation for the urgency to ease the intense strains on financial markets.

Investors also welcomed the respite from the recent days of heavy selling, but the S&P 500 remained down 11.1% for the week and not all sectors participated in today's advance. The S&P 500 consumer discretionary (+3.4%) and energy (+6.8%) sectors presumably outperformed amid tactical trading opportunities and, specifically for the energy space, the 23% spike in WTI crude ($20.42/bbl, +4.71, +23.1%).

Oil prices were aided by comments from President Trump, who said that he will get involved in the price war between Russia and Saudi Arabia at "the appropriate time." An afternoon report from The Wall Street Journal noted that Texas is considering cutting oil production. Today's move in oil follows a 24% price drop yesterday.

Left out of today's advance were the defensive-oriented S&P 500 utilities (-5.5%), consumer staples (-2.9%), health care (-1.9%), and real estate (-1.4%) sectors.

U.S. Treasuries finished sharply higher after two days of aggressive selling, driving yields lower across the curve. The 2-yr yield declined 14 basis points to 0.38%, and the 10-yr yield declined 15 basis points to 1.12%. The U.S. Dollar Index advanced 1.5% to 102.67, as demand remained strong for the world's reserve currency.

Reviewing Thursday's economic data:

Initial claims for the week ending March 14 increased by 70,000 to 281,000 (Briefing.com consensus 220,000), bolstered by the impact of the coronavirus. The unadjusted number of initial claims increased by 50,517 to 250,892. Continuing claims for the week ending March 7 increased by 2,000 to 1.701 million.
The key takeaway from the report is that it is an early warning sign of much larger claims numbers to come considering the fact that many forced, or voluntary, business closures didn't start to ramp up until the middle of the month with initial expectations that they will be closed at least through the end of March.
The Philadelphia Fed Index for March dropped to -12.7 (Briefing.com consensus 10.0) from the 36.7 reading in February.
The current account deficit for the fourth quarter totaled $109.8 billion. The third quarter deficit was revised to $125.4 billion from $124.1 billion.

Looking ahead, investors will receive Existing Home Sales for February on Friday.

Nasdaq Composite: -20.3%
S&P 500: -25.4%
Dow Jones Industrial Average: -29.6%
Russell 2000: -36.6%

Market Snapshot
Dow 20087.25 +188.27 (0.95%)
Nasdaq 7149.93 +160.73 (2.30%)
SP 500 2409.39 +11.29 (0.47%)
10-yr Note +23/32 1.175
NYSE Adv 2251 Dec 681 Vol 1.7 bln
Nasdaq Adv 2522 Dec 794 Vol 4.7 bln

Industry Watch
Strong: Energy, Consumer Discretionary
Weak: Utilities, Consumer Staples, Health Care, Real Estate

Moving the Market

-- Stocks close higher in volatile session; technology and small-cap stocks outperformed

-- Central banks stepped up stimulus measures to support financial markets, Washington continued to deliberate on stimulus package

-- Oil prices rebound 23% after President Trump says he would get involved in price war between Russia and Saudi Arabia

-- Treasuries advance after two days of selling

WTI crude rebounds 23% following yesterday's drop
19-Mar-20 15:35 ET
Dow +201.66 at 20100.64, Nasdaq +258.26 at 7247.46, S&P +31.45 at 2429.55

[BRIEFING.COM] The major averages continue to trade in positive territory with the S&P 500 up 1.8%, Dow up 1.5%, and Nasdaq up 4.2%.

The strength in the mega-cap technology stocks can account for the outperformance of the Nasdaq, while the benchmark index gets an added boost from the gains in the consumer discretionary (+4.6%) and energy (+4.2%) sectors.

WTI settled today's session up 23.1% (+$4.71) to $20.42/bbl after falling more than 24% yesterday. Today's spike came after President Trump said that he will get involved in the price war between Russia and Saudi Arabia at "the appropriate time."