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US stocks close higher but well off highs in volatile trading

  
Analysis, US Market
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Nasdaq was down -1.88% at the lows, and up 5.03% at the high today

The US stock indices are closing higher on the day but off the highs for the day. I guess you can say there well off the lows for the day too.  The NASDAQ index was down -1.8% at the lows, and up 5.03% the highs. It closed up 2.3%. The volatility is red hot.

The final numbers are showing:
  • The S&P index rose 11.29 points or 0.47% to 2409.39. The low price was at 2319.78, down -3.27% at the time. The high was at 2466.97, up 2.87% at the peak.
  • The Nasdaq index rose  160.73 points or 2.3% to 7150.57.
  • The Dow rose 188.27 points or 0.95% to 20087.19. The low price was at 19177.13, or down -3.63%. The high reached 20442.63, or up 2.73%.
A hugely volatile day for the US stocks.
The US stocks had a hugely volatile day

A Turnaround Tuesday. Major indices close higher.

  
Analysis, US Market
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6% gains for S&P and Nasdaq.

It is a Turnaround Tuesday for the major US stock indices.

The summary of what was a wild swing day is showing:
  • The S&P index rose 142.88 points or 5.99% to 2529.01. The low reached 2367.04. The high was up at 2553.93
  • The Nasdaq index rose 430.189 points or 6.23% to 7334.78. The low reached 6828.91. The high moved up to 7406.23
  • The Dow rose 1049.27 points or +5.2% to 21237.79. The low reached 19882.26. The high reached 21379.35
In the last hour of trading, their was what has been more typical volatility.  Below is the summary of the changes. Not only did stocks move higher, but the US 10 year yield moved up by 5 basis points.
6% gains for S&P and Nasdaq.
Although off the highs the major US indices are ending the day well off the lows.
Major indices close higher

European bond yields continue to rise over the past week

  
  Analysis
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10-year German bond yields rise to its highest levels in a month

GDBR10Y

Meanwhile, 10-year French and Spanish bond yields have both climbed to their highest levels since May 2019 to start the day. This comes as we also see Treasury yields rebound higher, with 10-year yields up by 10 bps to 0.82% currently.
It is tough to try and make sense with what is happening in the market because things change so quickly but I would argue that the selloff in European bonds isn’t exactly a good sign for the euro currency in general.
I would say the rise in Treasury yields represents a bit of a disconnect because the move higher there reflects more closely the slightly better risk mood today – which is also helping USD/JPY to stay underpinned, alongside gains in the dollar today that is.

The Philippines has suspended FX and bond trading

  
  Analysis
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Trading, clearing and settlement of foreign exchange and fixed interest suspended as of today

  • until further notice
There are plenty of calls for this to happen in major markets also. Be aware if you are in a position and the market is shuttered you will be unable to exit until it reopens. There may, of course, be work around hedges to be used.

Japanese business sentiment has fallen to a decade low (Reuters Tankan)

  
Analysis, Economy
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Bad data from the March survey, which is not surprising. ‘Highlights’ via Reuters report:

  • manufacturers’ sentiment index -20 vs Feb -5
  • Service-sector index -10 in March vs +15 in Feb
  • Manufacturers mood down ahead, service-sector flat
souring business mood could derail capital spending
All manufacturers across industries were pessimistic about business conditions,
Among service sector firms, no firms except those in real estate/construction and information/communications were optimistic.
Most of the companies expressed fears of the virus’ impact on their business, on top of already weak consumer spending due to an October sales tax hike and sluggish global demand aggravated by the U.S.-China trade war.
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Reuters poll of 501 large- and mid-sized nonfinancial companies, of which 242 firms responded
Bank of Japan’s tankan quarterly survey is due April 1

Nasdaq worst day ever. Stocks plunge.

  
Analysis, US Market
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What an active day:

  • The Fed cut rates 1% in the Asian session, surprising the market.
  • The Fed announced quantitative easing to the tune of 500bn Treasuries & 200bn MBS
  • The Fed announced that banks can borrow from the Discount window for up to 90 days
  • They added liquiidity via daily repo action.  The Fed basically said, whatever you need, we will provide
  • Later in the day, the Senate Democrats offered a $750B stimulus package (TBD how it progresses).

So what happened in the markets?

Stocks plummeted

  • The Nasdaq had its worst day ever.
  • The Dow and the S&P % decline was the worst since 1987
  • The Dow’s point drop was the worst point loss ever
Many superlatives, but unfortunately they are all negative.
The numbers at the close are showing:
  • Dow industrial average fell 2997.10 points or -12.93% to 20188.52.
  • S&P index fell -324.89 points or -11.98% to 238-6413
  • Nasdaq index fell -970.28 points or -12.32% at 6904.59
Forex news for NY trading on March 16, 2020
In the US debt market, not only did yields tumble with the 10 year leading the way at -23.4 basis points….
US yields traded higher with the longer and moving up the most.
…but the spreads between European and US started to converge. European 10 year yields were mostly higher with Germany up 8.3 basis points and France up 14.8 basis points.  The combination has pushed those levels closer and closer.
European yields rose in trading today

In the gold and precious metals market, prices fell.

  • Spot gold had a volatile day and is closing down $-18.46 or -1.21% at $1511.37.  The high for the day was up at $1575.47 while the low extended all the way down to $1451.55
  • Spot silver also traded violently. It is closing at $12.90, down $-1.81 or -12.35% It traded in a $3.30 trading range. The high reached $15.15, while the low extended to $11.80. Crazy volatility
The oil markets were also volatile and moved lower as Saudi Arabia said they were not backing down from production cuts. The final numbers are showing:
  • WTI crude oil futures $28.70. $-3.03 or -9.55%. The high price reached $33.75. The low price extended to $28.10.
  • Brent crude oil is trading at $29.52, or $-4.33 or -12.79% on the day.  It’s high price extended to $35.84 while the low fell to $29.50.
Finally in the forex market, the flows so the JPY and the EUR benefit the most. They were the strongest of the major currencies. The JPY benefited from the Pavlovian flight into the “safety of the JPY”. The EUR is a bit of a head scratcher as it is the current epicenter of the coronavirus.

US stocks go out at the lows. The Dow tumbles 10%

  
Analysis, US Market
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NASDAQ and S&P index fall over 9.4%

The US stocks are going out at the lows and down sharply after the markets were not impressed with the President’s address to the nation and the headlines continue to point to slower growth.  The US sporting events are shutting down. The number of infected and deaths continued to grow in Europe.  A massive liquidity add by the Fed could not help.
The final numbers are showing:
  • S&P index -260.6 points or -9.51% at 2480.78
  • NASDAQ index -750.25 points or -9.43% at 7201.80
  • Dow industrial average -2352.33 points or -9.99% at 21200.85.

The changes in major stock marketsYear to date numbers are showing:

  • Dow, -25.71%
  • S&P, -23.22%
  • Nasdaq, -19.74%
  • Canada S&P/TSX index -26.69%
  • Euro Stoxx 50, -32.04%
  • UK FTSE 100 -30.56%
  • German DAX, -30.85%
  • France’s CAC, -32.35%
  • Japan’s new guy, -21.55%
  • Hong Kong’s Hang Seng -13.77%
  • Australia’s S&P/ASX 200, -20 64%
There is nothing good coming out the stock market.

Year to

Coronavirus – CME will close its Chicago trading floor at end-Friday

  
  Analysis
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Floor will close indefinitely. Globex trade to continue.

  • CME group to close Chicago trading floor as a precaution
  • reopening of trading floor will be evaluated as more medical guidance on coronavirus becomes available
  • will close its Chicago trading floor as of close of business Friday, March 13, 2020, as a precaution to reduce large gatherings
  • no coronavirus cases have been reported on trading floor or in Chicago board of trade building
  • company’s headquarters will remain open
  • all products will continue to trade on CME Globex as they do today.

US stocks post largest one-day gain since December 2018

  
Analysis, US Market
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Big gains in the US and Canada

Daily change:
  • S&P 500 +135 points to 2882, +4.94%
  • Nasdaq +4.95%
  • DJIA +4.4%
  • Toronto TSX +3.1% — biggest gain since 2011
That a 3.1% gain in Canada is the biggest since 2011 is sad on so many levels. That index is below the 2008 highs.
Big gains in the US and Canada

Japan finance minister Aso was asked about the potential for intervention in yen

  
  Analysis
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In response, Aso said that while he had no comment on volatility in the FX market he will respond appropriately depending on market conditions

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In Japan intervention in the currency market is directed by the Ministry of Finance. The bojj Bank of Japan will take the necessary steps in the market, but the directive comes from the Ministry. This is not the case in most other DM central banks, where intervention decisions are taken by the central bank itself (there is often consolation with the relevant government department of course).
In response, Aso said that while he had no comment on volatility in the FX market he will respond appropriately depending on market conditions
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