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US stocks suffer worst day since 2008

  
Analysis, Global Indices
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Closing levels for the main US indexes

Closing levels for the main US indexes
US stocks fell to fresh session lows of 8% late in the day but staged a small bounce late in the day to finish at slightly better levels.
Nonetheless, it was the worst day for US stock markets since 2008 and possibly the worst day ever for oil stocks.
Here is the damage:
  • S&P 500 -7.6% — a 226 point decline to 2746
  • DJIA a 7.8% decline or -2015 points to 23,849
  • Nasdaq -625 points to 7950 — a 7.3% decline
  • Toronto TSX -9.3%
These headlines all sound terrible and this was the worst day for US stocks since December 2008 but when you consider that we’re only back to the June lows, it doesn’t seem that bad. A fall to the 2018 lows would be a decline of 31%.

European major indices end their nightmare of a day

  
Analysis, Global Indices
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Major indices down over 7%

The European stock markets are now close for the day and the nightmare is over.  The major indices all closed over 7% lower.   For the year the declines are near the -20% level. Ouch.
The provisional closes for the major indices are showing:
  • German DAX, -7.4%
  • France’s CAC, -7.9%
  • UK’s FTSE 100, -7.3%
  • Spain’s Ibex, -8.1%
  • Italy’s FTSE MIB, -11.1%
For the trading year, the provisional changes are showing
  • German DAX, -19.8%
  • France’s CAC, -20.67%
  • UK’s FTSE 100, -20.3%
  • Spain’s Ibex, -18.9%
  • Italy’s FTSE MIB, -20.3%
In other markets as London/European traders look to exit:
  • spot gold is down $6.20 or -0.37% at $1667
  • WTI crude oil futures are down $8 or -19.43% at $33.26
In the US stock market:
  • S&P index is down -169 points or -5.7% the 2802
  • NASDAQ index is down -425 points or 4.98% at 8148
  • Dow is down -1600 points or -6.2% at 24263
In the US debt market yields remain sharply lower.
Major indices down over 7%_

CFTC commitments of traders: EURUSD shorts are trimmed but still against the price trend this week

  
Analysis, Forex
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Forex futures positioning data for the week ending March 3, 2020

  • EUR short 87K vs 114K short last week. Shorts decreased by 27K
  • GBP long 35K vs 30K long last week. Longs increased by 5K
  • JPY short 42K vs 56K short last week. Shorts decreased by 14k
  • CHF short 3K vs 1K long last week. Shorts increased by 4K
  • AUD short 52k vs 44K short last week. Shorts increased by 8K
  • NZD short 17K vs 15K short last week. Shorts increased by 2K
  • CAD long 11k vs 15K long last week. Longs increased by 4K

Highlights:

  • The EUR remains the largest speculative position and it is still short, but there was a relatively large liquidation of 27K.  The EURUSD bottomed on February 20. The price has been up 9 of the last 11 trading days.  The squeeze higher seems to have led to some liquidation of the short positions. Traders are still offsides given the recent sharp move back higher.
  • The JPY has been getting stronger as stocks and rates tumbled.  The USDJPY is trading at the lowest level since August 27 (higher JPY).  Speculative positions remain short JPY (long USD), and losing money.  Like the EUR, the position has been trimmed but traders remain short the JPY (long the USD) and against the price trend this week.
  • The AUD has moved higher off the low from last Friday. Speculative positions in the AUD saw an increase of 8K in the net short position. The short is losing against the rising value of the AUD this week.
  • The speculative position in the GBP (Long 35K) is benefiting this week as the GBPUSD has marched higher last Friday’s low.

Forex futures positioning data for the week ending March 3, 2020

Another sharp day down in the major US indices

  
Analysis, PODCAST, US Market
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Yields fall to new lows

The risk off flows continued in the US stock market and debt market.
The Dow industrial average was down over 1000 points at 1 point during the day. The S&P index fell below the 3000 level briefly before rebounding in the last hour of trading.
In the US debt market yields resumed their downward bias after yesterdays modest rebound.
The final numbers for the major indices are showing:
  • S&P index -106.18 points or -3.39% at 3023.94. The low price extended to 2999.83. The high was up at 3083.04
  • NASDAQ index fell -279.49 points or -3.10% at 8738.59. The low price reached 8677.387. The high price extended to 8921.078
  • Dow industrial average fell minus this 969.58 points or -3.58% at 26121.28. The low price extended to 25943.33. The high price reached 26671.92
In the US debt market the 10 year yield fell to a new record low level of 0.898%. It is currently trading at 0.91%. That is still down -14.2 basis points on the day. The yield curve flattening a bit to 32.49 basis points from close to 36 basis points the close yesterday, but all maturity levels fell by over -10 basis points.

US yields tumbled lower

European equities start to see gains erode

  
Analysis, Global Indices
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DAX turns negative, Stoxx 600 turns flat on the day

Germany DAX

Trouble in paradise? Both were up by a little over 2% to start the European morning but we are seeing the market turn tail and run with USD/CHF slipping back close to 0.9600.
US futures have also seen gains from the early European morning peter out, with E-minis just up by ~0.5% currently. USD/JPY is also back lower now to 107.75 after having hit a high of 108.58 just two hours ago.
The market is still holding out hope for global central bank stimulus, but as highlighted here, it may not necessarily be the solution to dig investors out of the hole.

Bloodbath : Major indices get hammered. All 3 major indices down -4.4% on the day

  
Analysis, US Market
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Major indices lose 1% additional in the last 15 minutes of trading on major liquidation

the major indices in the US get hammered once again with the Dow, S&P and Nasdaq indices all lower by -4.4%

The S&P and Dow had there worst point drop in history (not % though).  Major indices all closed in correction (down over 10% from the highs).
The final numbers are showing:
  • S&P index, -137.89 points or -4.42% at 2978.51.
  • The NASDAQ index -414.29 points or 4.61% at 8566.48.
  • Dow industrial average 1192.27 points or -4.42% at 29765.33
Year to date, the
  • Dow is down -9.71%
  • S&P is down -7.8%
  • Nasdaq is down -4.53%
From the high last week, the major indices are showing:
  • NASDAQ index -13%
  • S&P is down -12.30%
  • Dow is down about 12.9%
The Vix, often called the fear index has moved up to 38.5. That surpasses the 36.2 high from December 2018.  That’s the highest level since February 2018. The highest volatility index going back to 2015 moved up to 50.3 and 2018 and 53.29 and 2015.

The good news is that the European stock markets are closed

  
Analysis, Global Indices
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German DAX, -3.1%. France’s CAC down -3.8%

The good news for the European stock markets is that they are close for the day.  Each of the major indices had sharp declines. Sometimes closing feels good. The provisional closes are showing:
  • German DAX, -3.1%
  • France’s CAC, -3.2%
  • UK’s FTSE 100, -3.5%
  • Spain’s Ibex, -3.8%
  • Italy’s FTSE MIB, -2.6%
To give an idea of the year to date performance of the major indices :
  • Germany, -6.65%
  • France, -7.6%
  • UK FTSE 100, -9.7%
  • Spain’s Ibex, -5.6%
  • Italy’s FTSE MIB, -2.8%
Comparing to the US market year-to-date:
  • Dow industrial average, -7.6%
  • S&P index, -5.63%
  • NASDAQ index -2.42%
In Asia the year-to-date’s are showing:
  • Japan’s Nikkei, -7.22%
  • Hong Kong’s Hang Seng index, -5.01%
  • Australia S&P/ASX 200 -0.39%
  • China’s Shanghai index -1.93%

In other markets as London/European traders look to exit:

  • gold is trading up $12.80 or 0.78% at $1653.72
  • WTI crude oil futures are trading down $-2.08 or -4.25% of $46.66
In the US stock market the snapshot of the major indices currently shows:
  • S&P index -69.3 points or -2.22% of 3047.44
  • NASDAQ index -221.2 points or -2.46% at 8759.96
  • Dow -578 points or at -2.17% at 26371
In the US debt market yields are sharply lower with the 2 year down -8.9 basis points. The 10 year is down -5.8 basis points.. The 2 – 10 yield spread has widened to 20.42 basis points from 17.24 basis points yesterday on increasing expectations that the FOMC will be forced to lower rates
US yields are lower across the board with a letter yield curve
In the European debt market, yields are mixed with German, France, and UK yields lower while Spain, Italy, Portugal yields are higher (flight to safety and out of the riskier countries):
European yields are mixed
In the forex market, the EUR is the strongest (and got stronger in the session).  Germany did say earlier today that they would contemplate more fiscal stimulus and technicals improved. The EURUSD did run into resistance against the 1.100 level however.
The weakest currency is the CAD as oil continues to get hammered. The GBP and USD are also weaker on the day:

European shares end the session with sharp declines

  
Analysis, Global Indices
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German DAX -1.8%

The major European shares are ending the session with sharp declines. For the year, the major European indices are also in the red.  A look at the provisional closes are showing:

  • German DAX, -1.8%
  • France’s CAC, -2.0%
  • UK’s FTSE 100, -1.9%
  • Spain’s Ibex, -2.4%
  • Italy’s FTSE MIB, -1.4%
For the year, changes are all in the red led by a 7% decline in the UK FTSE 100.
  • German DAX, -3.4%
  • France’s CAC, -5%
  • UK’s FTSE, -7%
  • Spain’s Ibex, -3.1%
  • Italy’s FTSE MIB, -1.6%
In other markets as the European/London traders look to exit are showing:
  • Gold is still negative. It is trading down $10.80 or -0.65% at $1648.10. The spot price tried rebound and move higher on the fall in stocks, but seems to have sellers above. Recall that in yesterday’s trade, there was a large seller reported in the futures market which helped push the price lower in the New York afternoon session
  • WTI crude oil futures are following the risk off sentiment with the contract trading down -$0.89 or -1.7% at $50.54. The price is not far off the low at $50.37. The high reached $52.02
In the US stock market, the NASDAQ is leading the charge to the downside. It is currently down -100 points or -1.11% and 9116.
  • Dow -308 points or -1.11% at 27653
  • S&P index -34.5 points or -1.07% at 3191
  • Nasdaq down -100 points or -1.11% at 9116

Dow tumbles more than 1000 points. Worst day since Feb 8, 2018

  
Analysis, US Market
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S&P worse day since December 2018

The Dow is closing down over 1000 points on the day. It is the workstations February 8, 2018. The S&P index at its worst day since December 2018.  The Dow, S&P and Nasdaq each fell over 3.3% on the day with the NASDAQ hit the hardest at -3.71%.
The Dow and the S&P are now negative on the year:
  • Dow -2.02%
  • S&P index, -0.15%
  • The Nasdaq index is still up on the year at +2.77%
The final numbers are showing:
  • S&P index -111.82 points or -3.35% at 3225.93.  The low price for the day reach 3214.65. The high extended to 3259.81.
  • Nasdaq index fell minus 355.309 points or -3.71% at 9221.28. The low for the day reached 9166.00. The high reached 9322.879.
  • Dow fell -1031.33 points or -3.56% at 27961. The low for the day reached 27912.44. The high for the day was up at 28402.93

Big losers on the day include:

  • United health, -7.87%
  • AMD, -7.83%
  • Tesla, -7.49%
  • Schlumberger, -7.4%
  • Nvidia, -7.13%
  • Delta airlines -6.31%
  • Twitter, -6.29%
  • Wynn Resort, -6.03%
  • Intuitive Surgical -5.38%
  • Morgan Stanley, -5.21%
  • Charles Schwab, -5.19%
  • FedEx -5.16%
  • Citigroup, -5.10%
  • American Express, -4.97%
  • Cisco, -4.95%
  • Visa, -4.82%
Are there any winners today?
  • Gilead, +4.66%
  • US steel, +1.73%
  • Chewy, +1.3%
  • First Solar, +1.25%
  • Verizon, -0.3%. Verizon was the strongest of the Dow 30 stocks
  • General Mills only fell -0.37%

 

30 year yield falls to a new all time low

  
  Analysis
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The headline of the day is that the 30 year yield traded to a new all time low of 1.8843%. That took out the August 2019 low yield of 1.9039% and although the yield is closing above that old low, the closing level will be the lowest on record.

Forex news for NY trading on February 21, 2020

Helping the yields move lower is the:

  • Expectation of a cut in US rates by July and potential for another cut later in the year
  • Flight to safety flows
  • Lower global growth from the coronavirus
  • Dollar buying as the US remains a safe haven
  • The Markit Service and Composite PMI data was below the 50.0 level while the manufacturing index was lower than expectations as well.
The 10 year yield also moved lower and approached the swing low from 2019 at 1.4272%. The low yield today reached 1.4359% before rebounding into the close to 1.4700%.  The all time low yield was in 2016 at 1.3180% (see chart below).
The 10 year yield fell below support at 1.50% and looks toward the 2019 low yield at 1.4272%
Below is a table of the current, high and low yields for the US debt along the yield curve.   The 2-10 year spread also flattened to 12.14 basis points from 12.60 basis points yesterday.
The US yields are moving lower. US stocks today fell with the Nasdaq leading the way down. For the day, the Nasdaq fell -1.79% after being down as much as 2.14% at the low. The S&P index closed down a more modest -1.05% after falling as much as -1.33%.   For the week, the major indices fell with the Dow down -1.46%, the S&P down -1.07% and the Nasdaq index down -1.39%.
Gold was another big mover today and this week. The price of gold is trading up $24.00 or 1.48% at $1643.43. The high for the day reached $1649.26. That was the highest level since February 2013. For the week, the price of gold settled last Friday at $1584. The current price at $1643.43 is a $59.43 gain for the week or 3.75% gain.   Big breakout move for gold this week.
Gold moved up nearly $60 this week
The fall in stocks, rise in gold, fall in yields led to a fall in the USD today. The USD was the weakest of the major currencies today. The strongest currency was the GBP (but it came off the highs in the NY session).   The dollar fell by 0.61% vs the GBP. It also fell versus the EUR by -.59% vs the EUR and -0.58% vs the CHF.
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