US Stock Market Weekly Update March 2- March 6, 2020
Another week with increased levels of volatility for the US stock market, bond yields declining to record low levels and an unexpected Fed rate cut of 50 basis points. This resulted in depreciating the US dollar against major currencies such as the Japanese Yen, the Swiss Franc and the Euro. The daily coronavirus developments were more than enough to move the global financial markets the previous week. Despite the selloffs this week, major US stock market indices closed higher, and this may be a sign of potential recovery.
Two very important economic news topics worth focusing on were tThe surprising Fed rate cut of 50 basis points (to boost the economy and protect it from the coronavirus outbreak), and the very strong US non-farm payrolls on Friday, March 6, 2020.
The markets now expect further rate cuts by the Fed later in March. Any further rate cut should act as support for the stock market, but now the real catalyst is clearly a risk-off mood, and daily news about the coronavirus developments. A weak US dollar can be a positive factor for US exports and companies with strong presence outside the US, but it can add inflationary pressures to the economy for goods and services that are imported in the US economy. The 10-yr bond yield closed at record low levels at 0.7060%, on Friday, March 6, 2020. Any stock market recovery from the current price levels should see logically any rally for the bond yields, and a shift of sentiment from safe assets such as bonds to riskier assets such as equities.
US strong jobs report did little to change the selling pressure on stocks
“The US economy added 273 thousand jobs in February of 2020, the most since May 2018, compared to an upwardly revised 273 thousand in January and market expectations of 175 thousand. In February, biggest job gains occurred in health care and social assistance, food services and drinking places, government, construction, professional and technical services, and financial activities.”, Source: Trading Economics
On Friday, March 6, 2020 a strong jobs report exceeding expectations was almost ignored by the stock market. The actual data for the following months will be more representative about the actual economic impact of the coronavirus to the US economy.
For the week of March 2– March 6, 2020 the major US stock market indexes closed as follows on Friday, March 6, 2020:
• Dow Jones Industrial Average: Close 25864.78, +1.79% for the week, -9.37% Year-to-date
• S&P 500 Index: Close 2972.37, +0.61% for the week, -8.00% Year-to-date
• NASDAQ: Close 8575.62, +0.10% for the week, - 4.42%, Year-to-date
• Russell 2000: Close 1449.22, -1.84% for the week, -13.14% Year-to-date
Weekly Stocks Gainers
These are the top 3 gainers, stocks with 5 days of consecutive price advances:
1. Inovio Pharma (NASDAQ: INO), Close 14.09, 5-day change +229.11%
2. Counterpath Corp (NASDAQ: CPAH), Close 2.83, 5-day change +36.06%
3. Rockwell Medical IN (NASDAQ: RMTI), Close 3.57, 5-day change +27.05%
Weekly Stocks Losers
These are the top 3 losers, stocks with 5 days of consecutive price declines:
1. Playags Inc (NYSE: AGS), Close 6.21, 5-day change -35.91%
2. Enlivex Therapeutics Ltd (NASDAQ: ENLV), Close 5.75, 5-day change -35.75%
3. Nabors Industries Inc [Nbr/Pa] (NYSE: NBR), Close 9.78, 5-day change -34.27%
Economic events for the week March 9- March 13, 2020:
Important economic data for this week will be the US inflation figures and consumer sentiment.
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Sources:
https://quotes.wsj.com/index/US/COMP
https://www.barchart.com
https://www.dailyfx.com/economic-calendar
Disclosure: I have no position in any stock mentioned