Stocks Hit Two-Week Lows As Infections Soar

Hi Everyone,

The stock market finished deep in the red on Friday as investors dumped risk assets amid intensifying virus-related fears. The Dow was down 730, or 2.8%, to 25,016, the Nasdaq lost 270, or 2.7%, to 9,756, while the S&P 500 fell 75, or 2.4%, to 3,009. Decliners outnumbered advancing issues by a 6-to-1 ratio on the NYSE, where volume was moderate.

Traders said that sellers were clearly in control throughout the day on Friday, as stocks closed near their intraday lows. As one trader explained, “Bulls failed to stage a substantial intraday bounce on Friday, which could mean that we are in for another volatile week.”

Stocks started the week where they left off on Friday, as quiet, albeit slightly nervous, trading continued the first two days of the week. As COVID-related headlines got worse and worse, volatility picked up again in the second half of the week, with the resurfacing of trade-related worries and continued economic uncertainty also weighing on risk assets. On a positive note, geopolitical tensions eased in Asia, and despite the resurgence of the virus in the U.S., financial markets stabilized ahead of the weekend break. That said, the divide between the tech sector and the rest of the market remains apparent. The Nasdaq hit a new record this week, mind you, but with the pandemic still raging in several fragile countries, volatility might stay with us for a long time.

The job market will be in focus next week, in terms of economic releases, and given the huge surprises of the past weeks, both negative and positive, traders will not be bored. Pending home sales will be released on Monday, the CB consumer confidence number will be out on Tuesday, the ADP payrolls number and the ISM manufacturing PMI will highlight Wednesday’s session. The week will end with the government jobs report on Thursday, ahead of the long July 4 weekend. The end of the second quarter could also lead to wild swings across asset classes as a lot of institutions will be forced to rebalance their portfolios in the wake of the COVID crash and the subsequent recovery, so buckle up for a tumultuous holiday-shortened week.

As always, have a great evening and stay tuned!!!

Joe

Skills

Posted on

June 28, 2020

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