Failed bounce, renewed horror

US equity indexes closed powerfully lower, sp -97pts (3.0%) at 3128. Nasdaq comp' -2.8%. Dow -3.1%. The Transports settled -4.3%.

sp'daily5

VIX'daily3

Summary

US equities opened on a positive note, but the SPX stalled at 3246, and then spiraled lower into the afternoon.

Meanwhile....

It was another no-mask day for Ms. Yoon of CNBC. Whilst 30% of Chinese SMEs are reportedly back up and running (but probably not at full speed/capacity), that still leaves 70% still closed for business.

The afternoon saw equities under increasing pressure via the bond market, and further Corona headlines.

CNBC naturally wheeled out the Kudlow...

Larry is often a contrarian indicator, and his view that it won't be an 'economic tragedy' should at least somewhat concern you!

Volatility opened lower, but swung upward with renewed equity upset, the VIX settling +11.3% at 27.85. The rest of the week should be equally... dynamic!
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Sunshine after the rains

Something dark is coming

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QE and rate cuts won't cure Corona

US equity indexes closed powerfully lower, sp -111pts (3.3%) at 3225. Nasdaq comp' -3.7%. Dow -3.5%. The Transports settled -3.7%.

sp'daily5

VIX'daily3

Summary

US equities opened very significantly lower, pressured by a number of adverse Corona related headlines. Price action remained weak into the afternoon, seeing a spike floor from 3214, rebounding to 3253, but then leaning lower into the close. 

No mask for Ms. Yoon of CNBC, thats bullish, right?

Volatility naturally spiked, with the VIX settling +46.5% at 25.03. Whilst Tuesday could easily open lower, I'd be mindful of a Tuesday reversal, as high as around 3300, before resuming lower into end month.


QE and rate cuts won't cure Corona

It should be clear, the various central banks, not least the US Fed' will do the only thing they know.... cut rates and print.

Right now, rate cut'4 appears due at the FOMC of March 11th, or a more probable April 29th. Further, ongoing t-bill buying of $60bn a month will likely continue into the summer.

However many hundreds of billions the Fed and others central banks throw at the financial system, it sure won't cure the Corona virus. Whilst the human toll might remain statistically insignificant, a collapse of the global supply chain would merit as a black swan.

Ohh, and whilst the market is focused on Corona, there is the matter of who might become the Democrat nominee. It would seem Sanders will get the most votes, but whether the DNC can stop him... very difficult to say. March 3rd... aka Super Tuesday will merit extra popcorn.

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Trump appeared after the market close...

Make of that... what you will.

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Goodnight from London
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Weekend update - US equity indexes

It was a somewhat mixed week for US equity indexes, with net weekly changes ranging from -1.6% (Nasdaq comp'), -1.4% (Dow), -1.2% (SPX), -0.9% (NYSE comp'), to +0.4% (Transports).


Lets take our regular look at five of the main US indexes

sp'500

It was a mixed week for the SPX, breaking a new historic high of 3393, but settling -42pts (1.2%) to 3337. Momentum ticked lower, and at the current rate, might turn negative at the March 2nd open. I would note the most recent higher low of 3214. Massive support within 3000/2900s.


Nasdaq comp'

A mixed week for tech, with the Nasdaq printing a new historic high of 9838, but settling -154pts (1.6%) at 9576. This weeks candle is spiky, and leans to at least some degree of further s/t cooling. I would see the old resistance highs within the 8100/8300 zone... as first major support.


Dow

The mighty Dow settled -405pts (1.4%) to 28992. Weekly momentum is set to turn negative next week, and it threatens at least a test of the recent higher low of 28169.


NYSE comp'

The master index settled -121pts (0.9%) to 13975. Weekly momentum is set to turn negative next week, and offers further cooling to test the late Jan' low of 13573.


Trans

The 'old leader' - Transports, managed a net weekly gain of +46pts (0.4%) to 10908. The gains are rather bizarre, considering the ongoing Corona issue, which is a particular problem for the airlines and shippers. I would note the past five weekly candles are all spiky from around 11k, and it does threaten further cooling to the late Jan' low of 10533. Key stocks: CCL, RCL, NCLH, UAL, AAL, DAL
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Summary

Four US equity indexes settled net higher, with one net lower.

The Nasdaq lead the way lower, whilst the Transports managed a moderate gain.

The SPX and Nasdaq comp' broke new historic highs.
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Looking ahead

Earnings:

M - SHAK, TNDM, PANW, KEYS, INTU, HPE, HTZ, KTOS
T - HD, M , TREE, LL, SPCE, CRM, AMRN, SDC, GWPH, WW, PLNT, EXEL, REAL
W - CHK, LOW, TJX, WEN, PZZA, SQ, ETSY, TDOC, BKNG
T - CRON, BBY, BUD, JCP, AMTD, BYND, BIDU, TTD, OXY, WDAY, DELL, VMW, AMC
F - W, FL, VST, SCCO
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Econ-data: 

M - Chicago Fed' Nat' act', Dallas Fed' manu'
T - Case-Shiller HPI, FHFA HPI, consumer con', Richmond fed' manu'
W - New home sales, EIA Pet'
T - Durable goods orders, GDP Q4 (print 2), weekly jobs, pending home sales, Fed' bal
F - Intl' trade, pers' income/out, wholesale invent', Chicago PMI, consumer sent'

*as Friday is end month, I would expect more dynamic price action on higher volume. 
Further, due to the ongoing Corona issue, a case of 'rats selling into the weekend' could be expected.
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*the next post on this page...  there is nothing scheduled.