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ETF buying talk from Fed helps to lift sentiment

  
  Analysis
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The Fed will start buying ETFs early this month

The Fed will start buying ETFs early this month
A notice from the New York Fed saying that it plans to begin purchasing corporate bond ETFs early this month has helped to trim losses in equity markets.
The SMCCF is expected to begin purchasing eligible ETFs in early May. The PMCCF is expected to become operational and the SMCCF is expected to begin purchasing eligible corporate bonds soon thereafter. Additional details on timing will be made available as those dates approach.
The acronyms stand for: Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF).
They’re two of the roughly 20 programs and actions the Fed has rolled out since the pandemic.
The PMCCF will provide a funding backstop for corporate debt to Eligible Issuers so that they are better able to maintain business operations and capacity during the period of dislocation related to COVID-19. The SMCCF will support market liquidity for corporate debt by purchasing individual corporate bonds of Eligible Issuers and exchange-traded funds (ETFs) in the secondary market.
This describes what the Fed will be buying:
The PMCCF will provide companies access to credit by (i) purchasing qualifying bonds as the sole investor in a bond issuance, or (ii) purchasing portions of syndicated loans or bonds at issuance. The SMCCF may purchase in the secondary market (i) corporate bonds issued by investment-grade U.S. companies; (ii) corporate bonds issued by companies that were investment-grade rated as of March 22, 2020, and that remain rated at least BB-/Ba3 at the time of purchase; (iii) U.S.-listed ETFs whose investment objective is to provide broad exposure to the market for U.S. investment-grade corporate bonds; and (iv) U.S.-listed ETFs whose primary investment objective is exposure to U.S. high-yield corporate bonds.
Today’s trading is a microcosm of the past 6 weeks. One one side is the reality of the pandemic, on the other is are central banks and governments trying to take on the losses.
Overall, I don’t see this is as a particularly meaningful program but it sets a precedent and it doesn’t take too much creative thinking to see this applied to equity markets one day, like the BOJ.

US Indices take a Friday fall to finish the week slightly lower

  
Analysis, US Market
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On the day:
  • S&P 500 down 2.8%
  • DJIA -2.6%
  • Nasdaq -3.2%
  • TSX -1.0%
On the week:
  • S&P 500 down down 0.2%
  • DJIA -0.2%
  • Nasdaq -0.3%
  • TSX +1.4%

Here is a look at the weekly S&P 500 chart. That latest candle isn’t a pretty one:

A look at US and Canadian markets

European shares end with solid gains as risk on sentiment increases

  
Analysis, Global Indices
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Hopes f him him him rom Gilead news propel European shares higher.

European indices are ending the session with solid gains on hopes from the Gilead remdesivir drug,
  • German DAX, +3.0%
  • France’s CAC, +2.32%
  • UK’s FTSE 100, +2.77%
  • Spain’s Ibex, +3.24%
In the European 10 year note sector are mostly lower with the exception of Italy (their credit rating was lowered by Fitch after the close yesterday)
Hopes f him him him _rom Gilead news propel European shares higher.

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Nasdaq leads the way to the upside today. All major indices fall for the week.

  
Analysis, US Market
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Dow posts a 3 day win streak. All 11 S&P sectors close higher

the major indices all closing higher for the day with the NASDAQ index leading the way to the upside. The Dow industrial average posted a gain for the 3rd day in a row. All 11 sectors of the S&P closed higher.

The final numbers are showing:
  • Dow, +260 points or 1.11% at 23775.27
  • S&P index +38.94 points or 1.39% at 2836.74
  • Nasdaq index +139.77 points or 1.65% at 8634.52
For the week, all 3 major indices closed lower with the NASDAQ outperforming relatively. The numbers for the week show:
  • Dow, -1.93%
  • S&P, -1.32%
  • Nasdaq close modestly lower at -0.18%.
For the week, some oversized winners included:
  • Beyond Meat +41.44% as meet distributors close operations due to coronavirus
  • Rite Aid +22.75%
  • Papa John’s, +10.52%
  • Lyft, +9.74%
  • DuPont, +9.23%
  • Chipotle, +8.23%
  • Twitter, +7.64%
  • Facebook, +6.05%
  • Schlumberger J, +5.3%
  • IBM +3.83%
  • Bristol-Myers Squibb, +2.71%
  • Box, +2.45%
  • Johnson & Johnson +1.81%
  • Home Depot, +1.35%
  • Pfizer, +1.33%
Big decliners for the week included:
  • Boeing, -16.24%
  • United Airlines -12.07%
  • Deutsche Bank, -9.02%
  • Delta Air Lines, -7.66%
  • Slack, -7.26%
  • General Dynamics, -6.5%
  • Southwest Airlines, -5.93%
  • Coca-Cola, -5.47%
  • Walt Disney, -5.16%
  • Gilead -5.16%
  • Citigroup, -5.15%
  • Wells Fargo, -5.11%
  • Lockheed Martin, -4.93%
  • American Express, -4.87%
  • Procter & Gamble, -4.8%
  • Bank of America, -4.73%
  • J.P. Morgan, -4.71%
  • Raytheon technologies, -4.06%
  • travelers, -4.05%

Broader indices fall over 3%. Dow down -2.67%

  
Analysis, US Market
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All S&P sectors close lower.

The broader stock indices fell over 3% with the Nasdaq leading the way to the downside. The Dow 30 index fell -2.67%
The final numbers are showing:
  • The S&P index fell -86.60 points or -3.07% at2736.60
  • The Nasdaq index fell -297/49 points or -3.48% at 8263.23
  • The Dow 30 stock index fel -631 points or -2.67% at 23018.88.
Netflix shares are higher after the close after subscriber numbers surged 15.8M vs est of 8.47M
The 1Q revenues came in at $5.77B vs $5.76B estimate.  EPS came in at $1.57. They see 2Q rising to $1.81.

US stocks move higher led by the Nasdaq index

  
Analysis, US Market
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Dow lags as Boeing slumps

The US stock indices closed higher on the day led by the Nasdaq index. The S&P  and Dow closed higher as well but the gains were well behind the tech heavy Nasdaq. For the Dow, the blame fall firmly on Boeing which alone fell over 7% on the day.
The final numbers are showing:
  • S&P index rose 16.19 points or 0.58% at 2799.55
  • Nasdaq index rose 139.18 points or 1.66% at 8532.36
  • Dow rose 33.33 points or 0.14% at 23537.68

NASDAQ index closes above its 50 and 200 day moving averages

  
Analysis, US Market
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NASDAQ up for the 4th day in a row

The NASDAQ index is the star performer today, rising for the 4th day in a row closing above its 50 day and 200 day moving averages. The close above the 200 day moving averages the 1st since March 6.  The other indices also had solid days today with the S&P and Dow closing at the highest level since March 10.

The final numbers are showing:
  • S&P index up 84.43 points or 3.06% at 2846.06
  • NASDAQ index up 323.31 points or 3.95% at 8515.74
  • Dow industrial average up 558.99 points or 2.39% at 23949.76
Some of the major gainers today included:
  • Tesla, +9.07%
  • AMD, +7.83%
  • United holdings, +6.72%
  • Adobe, +6.24%
  • Qualcomm, +5.75%
  • Delta Air Lines, +5.59%
  • Raytheon, +5.27%
  • Nvidia, +5.3%
  • Amazon, +5.28%
  • Apple, +5.04%
  • Microsoft, +4.95%
  • J&J, +4.39%

US major indices close lower but off the low levels for the day

  
Analysis, US Market
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Prices recover in the last hour of trading

The major indices are closing lower but off the low levels for the day. The last hour of trading saw prices move higher. The major indices have moved lower in 3 last 4 trading days
The final numbers are showing:
  • The S&P index fell -38.34 points or -1.52% at 2488.56. The high for the day reached 2538.18 . The low extended to 2459.96
  • the NASDAQ index fell -114.225 points or -1.53% to 7373.08. The high price reached 7518.71.The low extended to 7288.11
  • The Dow fell -357.99 points or -1.67% to 21055.49. The high price reached to 21 447.81. The low extended to 20863.09
For the week, the major indices all declined with the Dow industrial average falling the most. The changes for the week are showing:
  • Dow -2.7%
  • S&P -2.08%
  • Nasdaq -1.72%

YTD, the Dow al  so is leading the declines:

  • Dow -26.23%
  • S&P, -22.97%
  • Nasdaq, -17.83%.

An Update :US Dollar Index ,USDJPY ,AUDUSD ,USDINR ,EURO ,YEN ,GOLD ,SILVER ,PALLADIUM ,WTI ,BRENT ,SPX 500 -Anirudh Sethi

  
  Analysis
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The dollar rallied strongly from March 9 through March 20 or the start of last week on March 23.  It has subsequently sold off and done so in dramatic fashion.  It is not clear the trigger of the stunning reversal.  Some observers attribute it to the Fed’s currency swap lines, which were offered daily (seven-day operations) to a handful of large central banks.
Others link it to the better risk appetites reflected in meaningful bounces in equity markets, but nothing as striking as the 17% rally in the Nikkei.  Even with a 915-point tumble in the Dow and a 3.3% drop in the S&P 500 before the weekend, both ended with double-digit gains on the week.  Gold’s 8.6% rally will not sit well with those who view it as a safe haven.  The 30- and 60-day rolling correlations on the percent change of gold and the S&P 500 are positive for the first time since the middle of last year and October 2018, respectively.
The technical indicators that we monitor, the MACD and Slow Stochastic, have turned down for the dollar against all the major currencies.  The poor technical condition suggests the dollar’s weakness is more than a function of month- and quarter- and fiscal year-end flows, but was technically over-extended.  We will use Fibonacci retracement and moving averages to identify potential price targets and relative strength.
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Major indices close lower after late day rally fizzles out

  
Analysis, Global Indices, US Market
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Another big move in the last hour of trading

The major indices are closing lower on the day after the late day rally fizzled out.
Starting the last hour of trading, the major indices were trading at:
  • S&P index 2584.95, down -45.12 points or -1.72%
  • NASDAQ index 7648.96, down -148.57 points or -1.91%
  • Dow 22046.95, down -505.18 points or -2.24%
The closing levels are lower at:
  • S&P index fell -88.62 points or -3.37% to 2541.45
  • NASDAQ index fell -295.15 points or -3.79% to 7502.37
  • Dow fell -915.39 points or -4.06% to 21636.78
Over the last hour of trading, the major indices each traded to new day highs, but quickly sold off and are closing near the session lows (with the NASDAQ just off the day’s lows). In the last hour of trading, the:
  • S&P index went from a high of 2615.91 to a low of 2534.99 or a range of 80.92 points
  • Nasdaq index went from a high of 7716.24 to a low of 7497.02 or a range of 219.2 points
  • Dow went from a high of 22327 to a low of 21602 or a range of 725 points
Another big move in the last hour of tradingAlthough lower for the day for all major indices closed with gains.
Leading the way was the Japan’s Nikkei with a gain of +17.14%. In the US, the biggest gainer was the Dow up by 12.84%. It was helped by a move back higher in Boeing.   Boeing shares went from $97 on Monday to around $180 at the highs. It is closing today around $162.  The gain for the week was at 70.48%
The S&P index rose by 10.26%.  The NASDAQ gained 9.05%.
Other big gainers for the week were:
  • Delta Air Lines +38.36%
  • United Airlines +33.8%
  • Slack +28.3%
  • Home Depot up 25.05%
  • intuitive surgical, +24.41%
  • Nike up 23.51%
  • Nvidia, +22.75%
  • Micron, +20.41%
  • Tesla, +20.36%
  • Broadcom, +20.2%
  • American Express up 19.56%
  • United Technologies up 17.69%
  • United health up 17.04%
  In Europe the biggest gainer was the German DAX which rose 7.88%.
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