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Another volatile week pressured by corona virus.

Stocks fell on Friday to end another volatile week of trading, pressured by a spike in coronavirus - related deaths in New York while investors dealt with a grim U.S. jobs report.  The Dow Jones Industrial Average slid 360.91 points, or 1.7%, to 21,052.53.

The S&P 500 dropped 1.5% to 2,488.65. The Nasdaq Composite traded 1.5% lower to close at 7,373.08.

Wall Street has been down now for three out of the last four weeks. In USD the Dow lost 2.7% this week while the S&P 500 fell 2.1%. The Nasdaq ended the week down 1.7%. U.S. payrolls fell by 701,000 in March, easily the worst jobs report since 2009, while the unemployment rate jumped to 4.4%. Realistically, the data failed to capture the full extent of the ongoing economic blow from the coronavirus outbreak.

American Express, UnitedHealth and IBM fell more than 3% each to lead the Dow lower. Some of those losses were offset by Walmart, which turned around to close 0.7% higher after a report said the
company’s sales have jumped 20% in the past month.
Stocks did get a slight boost earlier in the trading day as oil rose 12%, adding to its biggest one-day rally on record the previous day.

Both the Dow and S&P 500 remain some 26% below their respective all-time highs set in February as the spread of COVID-19 continues to batter equity markets.

Interestingly though, the Cboe Volatility Index, or VIX, tumbled 29% this past week, to finish below 50 for the first time since early March. While it is still elevated, we may be in for a period of less volatility. Let’s hope so, because that’s a further sign that the bottoming process is well underway with smaller up and down market moves.

Graph 1
Source: Bloomberg


For Australian overseas investors a weaker AUD (-2.7%) saved the week for USD and Yen markets.

(Daily returns local currency middle columns: 5 Day returns far right)

Graph 2Source: Bloomberg
 

Asian Markets. Daily return middle columns. 5 day return far right

Graph 3
Source: Bloomberg


Other Market Data: Friday’s CloseAUD .6014 +0.0017 -2.7% on the week Commodities

Crude Oil futures continued to rebound by 14.53% to $29.00 per barrel.

Gold futures moved higher by 0.83% to $1,649 per ounce.
Bonds

The US 10-year Treasury yield slipped to 0.591%.

Markets Department:
Australia is flattening the curve


Graph 4-1


U.S. Payrolls

Payrolls plummeted 701,000 in March and we expect an even steeper drop in April. To put that in perspective, the steepest drop for any month in the Great Recession was 800,000 in March 2009.

graph 5-2

Graph 6-1

Asset Class Performance: The Scorecard

Technology, healthcare and consumer staples (the ultimate defensive sector) best performers over most time periods.
Graph 7-1

Healthcare: Best house in a Bad Street

Graph 8Source: Strategas

And finally, the FED’s “QE4” rescue package is unprecedented in size, scope and speed. Hopefully it
stabilises the economy and markets. More to come possibly.

Graph 9


Important Economic Data: The Week Ahead

The economic calendar once again features “old news” from the pre-virus period.

The relevant items this week are initial jobless claims, mortgage applications, and Michigan
sentiment.

Graph 10

Source: briefing.com

A coyote on abandoned Michigan Ave in Chicago yesterday. Normally one of the busiest streets in downtown Chicago.

Graph 11

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