Stocks Tick Lower As U.S. COVID Cases Hit 175,000

The stock market fell amid the continued surge in the number of confirmed COVID-19 cases in the U.S. The Dow was down 410 or 1.8%, to 21,917, the Nasdaq lost 74, or 1.0%, to 7,700, while the S&P 500 fell by 42, or 1.6%, to 2,585. Decliners outnumbered advancing issues by an almost 3-to-2 ratio on the NYSE, where volume was the lightest it has been in over a month.

Traders said that stocks ended the month and the first quarter with a choppy and bearish session and the key breadth measures were weak for the second day in a row. As one trader explained, “Yesterday’s trends continued today on Wall Street, with small-caps and cyclical issues, most notably financials, showing weakness. The major indices held up well amid the quarter-end rebalancing, despite the worrisome selloff in the European financial sector.”

The U.S. reported its largest daily increase in the number of confirmed COVID-19 cases yet, and the number of deaths was also the highest ever. Cyclical issues were lagging the broader market due to the deterioration, even though energy-related stocks saw a month-end bounce. President Trump’s proposal concerning a $2 trillion infrastructure package wasn’t even enough to boost industrials. Today’s economic releases were better-than-expected, but the CB consumer confidence number and consumer-related issues were still under pressure throughout the session.

While today’s economic releases point to a miraculous recovery in China, with both the manufacturing and services PMIs already signaling growth, supply chain reports, and even the recent words of Chinese leader Xi suggest that the situation is far from rosy in the country. The initial lockdown-induced supply shock was followed by a global demand shock, and since Europe and the U.S. are not out of the woods, growth rates will likely remain subdued in China too. On another note, even though there are no signs of any secondary outbreaks in the country, the fact that China just closed all of its cinemas points to uncertainty among the country’s leaders.

As always, have a great evening, stay calm, stay home, stay healthy, do your part to flatten the curve and stay tuned!!!

Joe