Tuesday's rally was the best since August of last year, as the spread of the coronavirus appeared to be centered in China and has not advanced with great intensity to the rest of the world. While the situation in China is still dire, with 494 deaths cumulative totaled worldwide as of Tuesday night, the number of cases reported outside of its epicenter appears to have been mostly contained. In the United States, confirmed cases is holding at 11, and the global total outside of China is just 216. That compares well to the number of confirmed cases inside China, at 24,391 and still growing.
There is a very good interactive map and graphical overview from John Hopkins, here.
Also encouraging is news on treatments for the disease on various fronts. Chinese researchers have applied for a patent to employ Gilead Science's Remdesivir as a treatment, which was used to treat the first US patient in Washington state in late January. The first known case of coronavirus in the US was treated with the drug and continues to recover.
In the US, the Department of Health and Human Services (HHS) is collaborating with Regeneron Pharmaceuticals on a coronavirus treatment.
These positive developments have driven stocks higher after a sudden collapse on the major indices last Friday.
Elsewhere, Nancy Pelosi, apparently still upset that Donald J. Trump is still president of the United States, tore up her copy of Trump's State of the Union speech, immediately after the president had delivered his positive message to the congress. Despite the hissy fit by Speaker of the House Pelosi, Mr. Trump's presidency appears to be sailing along nicely despite partisan Democrat attempts to derail it. The president is expected to be cleared of any wrongdoing on Wednesday at 4:00 pm ET, when the Senate will likely acquit him on impeachment charges brought by the House Democrats.
There was more good economic news prior to Wednesday's market open, as ADP reported January private sector job gains of 291,000, the largest upswing in four years.
Stock futures point to a positive open in New York.
At the Close, Tuesday, February 4, 2020:
Dow Jones Industrial Average: 28,807.63, +407.82 (+1.44%)
NASDAQ: 9,467.97, +194.57 (+2.10%)
S&P 500: 3,297.59, +48.67 (+1.50%)
NYSE: 13,862.84, +184.91 (+1.35%)
Wednesday, February 5, 2020
Tuesday, February 4, 2020
Stocks Rebound As Coronavirus Scare Fades
Nothing to see here, move along.
At the Close, Monday, February 3, 2020:
Dow Jones Industrial Average: 28,399.81, +143.78 (+0.51%)
NASDAQ: 9,273.40, +122.47 (+1.34%)
S&P 500: 3,248.92, +23.40 (+0.73%)
NYSE: 13,677.92, +63.82 (+0.47%)
At the Close, Monday, February 3, 2020:
Dow Jones Industrial Average: 28,399.81, +143.78 (+0.51%)
NASDAQ: 9,273.40, +122.47 (+1.34%)
S&P 500: 3,248.92, +23.40 (+0.73%)
NYSE: 13,677.92, +63.82 (+0.47%)
Sunday, February 2, 2020
WEEKEND WRAP: Virus Fears Spark Selling Spree; But Preventive Measures May Be Slowing Advance of 2019-nCoV
It wasn't a particularly positive week for equities. In fact, it was negative, across the board, ending with a massive selloff on Friday, culminating in the worst week for US stocks since October, 2019.
The better part of the decline came on Friday, after the WHO had issued an international alert on the coronavirus (2019-nCoV) and US stocks soared off lows on Thursday. Reality set in Friday and accounted for 75-80% of the total weekly decline.
As the weekend wore on (this is now Sunday noon in the US, Eastern Time), more reports proved encouraging. The official count from China confirmed 14,380 cases total, and 304 deaths. On Saturday, a death in the Philippines was suggested to have been caused by coronavirus but that has yet to be confirmed. Medical professionals are awaiting further testing. The patient died from pneumonia, but it may have come from normal, seasonal flu.
In the US, there's a better chance of dying from the common flu than the coronavirus, according to the CDC.
Preliminary considerations are suggesting that the spread of the virus is being slowed by China's quarantines and travel restrictions and monitoring around the world and that many reports on social media such as Twitter and Facebook have proven false, misleading or negatively hyperbolic.
Patient Zero, i.e., the first case of the disease to have been reported in the United States (Washington state), became quite ill, was treated intravenously with remdesivir (a drug produced by Gilead Sciences (GILD)) and was recovering.
Also on Friday, Great Britain finally extricated itself from the European Union via what's been known as Brexit, the referendum passed by the British public more than three-and-a-half years ago (June 23, 2016), and President Trump appeared on the way to being acquitted on charges of impeachment by the Senate, which voted 51-49 against calling additional witnesses. A final vote on acquittal or guilt will be held at 4:00 pm ET, Wednesday, February 5.
As frightening as the coronavirus and other news may be, people around the world can take heart in the video below: Nigel Farage's final speech at the European Parliament. As of 11:00 pm January 31, 2020, Britain formally withdrew from the European Union.
At the Close, Friday, January 31, 2020:
Dow Jones Industrial Average: 28,256.03, -603.41 (-2.09%)
NASDAQ: 9,150.94, -148.00 (-1.59%)
S&P 500: 3,225.52, -58.14 (-1.77%)
NYSE: 13,614.10, -247.82 (-1.79%)
For the Week:
Dow: -733.70 (-2.53%)
NASDAQ: -163.98 (-1.76%)
S&P 500: -69.95 (-2.12%)
NYSE: -364.37 (-2.61%)
The better part of the decline came on Friday, after the WHO had issued an international alert on the coronavirus (2019-nCoV) and US stocks soared off lows on Thursday. Reality set in Friday and accounted for 75-80% of the total weekly decline.
As the weekend wore on (this is now Sunday noon in the US, Eastern Time), more reports proved encouraging. The official count from China confirmed 14,380 cases total, and 304 deaths. On Saturday, a death in the Philippines was suggested to have been caused by coronavirus but that has yet to be confirmed. Medical professionals are awaiting further testing. The patient died from pneumonia, but it may have come from normal, seasonal flu.
In the US, there's a better chance of dying from the common flu than the coronavirus, according to the CDC.
Preliminary considerations are suggesting that the spread of the virus is being slowed by China's quarantines and travel restrictions and monitoring around the world and that many reports on social media such as Twitter and Facebook have proven false, misleading or negatively hyperbolic.
Patient Zero, i.e., the first case of the disease to have been reported in the United States (Washington state), became quite ill, was treated intravenously with remdesivir (a drug produced by Gilead Sciences (GILD)) and was recovering.
Also on Friday, Great Britain finally extricated itself from the European Union via what's been known as Brexit, the referendum passed by the British public more than three-and-a-half years ago (June 23, 2016), and President Trump appeared on the way to being acquitted on charges of impeachment by the Senate, which voted 51-49 against calling additional witnesses. A final vote on acquittal or guilt will be held at 4:00 pm ET, Wednesday, February 5.
As frightening as the coronavirus and other news may be, people around the world can take heart in the video below: Nigel Farage's final speech at the European Parliament. As of 11:00 pm January 31, 2020, Britain formally withdrew from the European Union.
At the Close, Friday, January 31, 2020:
Dow Jones Industrial Average: 28,256.03, -603.41 (-2.09%)
NASDAQ: 9,150.94, -148.00 (-1.59%)
S&P 500: 3,225.52, -58.14 (-1.77%)
NYSE: 13,614.10, -247.82 (-1.79%)
For the Week:
Dow: -733.70 (-2.53%)
NASDAQ: -163.98 (-1.76%)
S&P 500: -69.95 (-2.12%)
NYSE: -364.37 (-2.61%)
Friday, January 31, 2020
Coronavirus, Now Global, Will Dominate News For Months
The idea that stocks would erase losses and finish strongly positive after the World Health Organization (WHO) announced that it was raising the level of threat to that of an international pandemic is just plain perverse.
It's what happens when 70% of the trading is performed by headline scanning algorithms that saw the WHO headline as essentially, "nothing to worry about, we got this."
Nothing could be further from the truth. The coronavirus has spread now to encompass the entire Northern Hemisphere, with Russia the latest to announce cases of the virus within its borders. Italy has issued a six month state of emergency. Two-thirds of China is under some form of travel restriction, quarantine, or other health-related orders. Person-to-person transmission has been reported in at least five countries, including Japan and the United States.
Within two weeks the most recent numbers (9692 confirmed cases, 213 deaths as of January 30) are going to be dwarfed by the magnitude of the spread of this pathogen, and there's still no reliable data on the ratio of confirmed cases to deaths, which range - according to medical experts - from two percent to as high as 12 percent, but nobody actually knows for sure.
The WHO, at its press conference Thursday announcing a global pandemic went out of its way to praise China's efforts to contain the virus. This statement was made only to avoid causing a panic. China was actually slow to report the initial outbreak, initially punishing people who were issuing warnings, eventually acting with little regard to human life, allowing the virus to spread unchecked for weeks.
Wikipedia has about as accurate and compelling a timeline as could be expected.
If the Chinese did such a bang-up job containing this virus, why is it now to be found in more than 25 other countries? Why are flights in and out of China only being banned now, nearly two months after the initial report of this new, deadly strain (December 1 or December 8)?
There's a very good chance, being that China has shut down most transportation facilities in and out of cities and provinces, that food shortages will occur and that more people may die from starvation or other causes than the actual disease.
This virus has been taken far too lightly and is going to continue to spread, virtually unchecked, for months.
Meanwhile, the Senate looks to wrap up the impeachment trial of President Trump on Friday after a vote to allow more witnesses is taken and will likely fail. The Republicans have 50 votes at least with which to defeat the motion, the only wild card being that the presiding judge, Chief Justice of the Supreme Court, John Roberts, could conceivably take the unprecedented step of deciding the motion should the vote come down as a 50-50 tie.
He is expected to NOT take that step, as a tie would defeat the measure.
In economic news, the first estimate of 2019 fourth quarter GDP came in at 2.1%, making all of 2019, at 2.3%, the worst year under President Trump. GDP grew by 2.9% in 2018, and 2.4% in 2017.
And, in Virginia, the state assembly is wasting no time making sure citizens cannot defend themselves.
At the Close, Thursday, January 30, 2020:
Dow Jones Industrial Average: 28,859.44, +124.99 (+0.43%)
NASDAQ: 9,298.93, +23.77 (+0.26%)
S&P 500: 3,283.66, +10.26 (+0.31%)
NYSE: 13,861.92, +18.11 (+0.13%)
It's what happens when 70% of the trading is performed by headline scanning algorithms that saw the WHO headline as essentially, "nothing to worry about, we got this."
Nothing could be further from the truth. The coronavirus has spread now to encompass the entire Northern Hemisphere, with Russia the latest to announce cases of the virus within its borders. Italy has issued a six month state of emergency. Two-thirds of China is under some form of travel restriction, quarantine, or other health-related orders. Person-to-person transmission has been reported in at least five countries, including Japan and the United States.
Within two weeks the most recent numbers (9692 confirmed cases, 213 deaths as of January 30) are going to be dwarfed by the magnitude of the spread of this pathogen, and there's still no reliable data on the ratio of confirmed cases to deaths, which range - according to medical experts - from two percent to as high as 12 percent, but nobody actually knows for sure.
The WHO, at its press conference Thursday announcing a global pandemic went out of its way to praise China's efforts to contain the virus. This statement was made only to avoid causing a panic. China was actually slow to report the initial outbreak, initially punishing people who were issuing warnings, eventually acting with little regard to human life, allowing the virus to spread unchecked for weeks.
Wikipedia has about as accurate and compelling a timeline as could be expected.
If the Chinese did such a bang-up job containing this virus, why is it now to be found in more than 25 other countries? Why are flights in and out of China only being banned now, nearly two months after the initial report of this new, deadly strain (December 1 or December 8)?
There's a very good chance, being that China has shut down most transportation facilities in and out of cities and provinces, that food shortages will occur and that more people may die from starvation or other causes than the actual disease.
This virus has been taken far too lightly and is going to continue to spread, virtually unchecked, for months.
Meanwhile, the Senate looks to wrap up the impeachment trial of President Trump on Friday after a vote to allow more witnesses is taken and will likely fail. The Republicans have 50 votes at least with which to defeat the motion, the only wild card being that the presiding judge, Chief Justice of the Supreme Court, John Roberts, could conceivably take the unprecedented step of deciding the motion should the vote come down as a 50-50 tie.
He is expected to NOT take that step, as a tie would defeat the measure.
In economic news, the first estimate of 2019 fourth quarter GDP came in at 2.1%, making all of 2019, at 2.3%, the worst year under President Trump. GDP grew by 2.9% in 2018, and 2.4% in 2017.
And, in Virginia, the state assembly is wasting no time making sure citizens cannot defend themselves.
At the Close, Thursday, January 30, 2020:
Dow Jones Industrial Average: 28,859.44, +124.99 (+0.43%)
NASDAQ: 9,298.93, +23.77 (+0.26%)
S&P 500: 3,283.66, +10.26 (+0.31%)
NYSE: 13,861.92, +18.11 (+0.13%)
Thursday, January 30, 2020
Coronavirus Spread Now Affecting Markets Globally Along With Individual Stocks, Bonds
As the novel coronavirus continues to spread internationally from its epicenter in Wuhan, the capitol of Hubei province, China, expect markets to respond as they did on Wednesday, where US gains at the opening bell were quickly wiped out. The Dow Industrials, in particular, soared more than 200 points at the open, only to be torn down to nearly unchanged within the first half hour of trading.
All of the major indices experienced similar patterns, and all were goosed higher by a phantom bid as they approached session lows. There was likely intervention behind the scenes which kept stocks from falling off the shelf into the abyss, as was the case on Monday.
With just three days of real data relatable to coronavirus, the infectious virus is undoubtably a market event. As has already been demonstrated, oil was the first casualty as crude prices have cratered since the Chinese government quarantined the entire Wuhan province last week and began issuing travel warnings.
Others are emerging. Starbucks (SBUX), which announced it was shutting down 2000 locations in China on Wednesday - about half of its stores in China - has seen its share price reduced from 93.75 on January 23 to 86.72 as of Wednesday's close. While the losses on Starbucks may be more attributable to the release of their fiscal first quarter (US fourth quarter) results on Tuesday, there are other chains which may be affected soon, Among those that have large presences in China are McDonald's (MCD), YUM Brands (YUM), owners of Pizza Hut and KFC, among other popular brands, and Dairy Queen, which is privately owned. Share of McDonald's and YUM Brands have been spared thus far, but the are definitely on many traders' short lists.
Also being affected are bond prices and yields, as the treasury curve has flattened out over the past week and the 10-year note has been knocked to to a yield of 1.58% as of this writing, the lowest since October 8 of last year. All yields on short term bills are currently inverted vis-a-vis the five-year note, with yields on 1, 2, 3, 6-month and one-year bills all higher than the five-year. The scramble to safety seems to be favoring shorter duration, a knock-on effect of a wait-and-see approach to the spread of the deadly virus.
As of Wednesday night (ET), Chinese authorities upped the death toll from the virus to 170, though experts in the field strongly suspect that China's officials are purposely skewing the numbers lower - reporting many deaths as caused by pneumonia or not reporting deaths at all in some cases - in order to not cause a widespread panic. Nevertheless, both the number of cases reported and deaths reported - in China and internationally - continue to rise, and person-to-person transmission of the disease has now been reported in South Korea, Germany, Thailand, and Japan. With an incubation period that can last up to 14 days before symptoms develop, it may take more time for numbers to rise dramatically.
The World Health Organization (WHO) is scheduled to make an announcement Thursday in Geneva, Switzerland at 7.30 pm local time (1830 GMT), which would coincide with the middle of the US market session. Expect fireworks to the downside if the organization deems the coronavirus a global pandemic situation, something it decided not to do when it met a week ago (January 23).
Elsewhere, the impeachment trial of president Trump is winding down quickly and it appears that the Republicans have enough votes to shut down any attempt by the Democrats to extend the process by calling more witnesses. With a 53-47 advantage in the Senate, the Republicans are expected to defeat any measure calling for anything that might extend the trial past Friday, when the vote on witnesses is set to occur.
Once the vote for witnesses is defeated, the Senate can move immediately to decide the trial either in favor of acquittal of the president or guilty, which would carry the penalty of removal from office and bar him from running for any other high office. With a two-thirds vote needed for a finding of guilt, it is widely expected that the president will be acquitted.
The prosecution managers and administration lawyers will field another day of questions from the Senators on Thursday, then proceed to voting on other trial matters Friday.
At the Close, Wednesday, January 29, 2020:
Dow Jones Industrial Average: 28,734.45, +11.60 (+0.04%)
NASDAQ: 9,275.16, +5.48 (+0.06%)
S&P 500: 3,273.40, -2.84 (-0.09%)
NYSE: 13,843.81, -33.80 (-0.24%)
All of the major indices experienced similar patterns, and all were goosed higher by a phantom bid as they approached session lows. There was likely intervention behind the scenes which kept stocks from falling off the shelf into the abyss, as was the case on Monday.
With just three days of real data relatable to coronavirus, the infectious virus is undoubtably a market event. As has already been demonstrated, oil was the first casualty as crude prices have cratered since the Chinese government quarantined the entire Wuhan province last week and began issuing travel warnings.
Others are emerging. Starbucks (SBUX), which announced it was shutting down 2000 locations in China on Wednesday - about half of its stores in China - has seen its share price reduced from 93.75 on January 23 to 86.72 as of Wednesday's close. While the losses on Starbucks may be more attributable to the release of their fiscal first quarter (US fourth quarter) results on Tuesday, there are other chains which may be affected soon, Among those that have large presences in China are McDonald's (MCD), YUM Brands (YUM), owners of Pizza Hut and KFC, among other popular brands, and Dairy Queen, which is privately owned. Share of McDonald's and YUM Brands have been spared thus far, but the are definitely on many traders' short lists.
Also being affected are bond prices and yields, as the treasury curve has flattened out over the past week and the 10-year note has been knocked to to a yield of 1.58% as of this writing, the lowest since October 8 of last year. All yields on short term bills are currently inverted vis-a-vis the five-year note, with yields on 1, 2, 3, 6-month and one-year bills all higher than the five-year. The scramble to safety seems to be favoring shorter duration, a knock-on effect of a wait-and-see approach to the spread of the deadly virus.
As of Wednesday night (ET), Chinese authorities upped the death toll from the virus to 170, though experts in the field strongly suspect that China's officials are purposely skewing the numbers lower - reporting many deaths as caused by pneumonia or not reporting deaths at all in some cases - in order to not cause a widespread panic. Nevertheless, both the number of cases reported and deaths reported - in China and internationally - continue to rise, and person-to-person transmission of the disease has now been reported in South Korea, Germany, Thailand, and Japan. With an incubation period that can last up to 14 days before symptoms develop, it may take more time for numbers to rise dramatically.
The World Health Organization (WHO) is scheduled to make an announcement Thursday in Geneva, Switzerland at 7.30 pm local time (1830 GMT), which would coincide with the middle of the US market session. Expect fireworks to the downside if the organization deems the coronavirus a global pandemic situation, something it decided not to do when it met a week ago (January 23).
Elsewhere, the impeachment trial of president Trump is winding down quickly and it appears that the Republicans have enough votes to shut down any attempt by the Democrats to extend the process by calling more witnesses. With a 53-47 advantage in the Senate, the Republicans are expected to defeat any measure calling for anything that might extend the trial past Friday, when the vote on witnesses is set to occur.
Once the vote for witnesses is defeated, the Senate can move immediately to decide the trial either in favor of acquittal of the president or guilty, which would carry the penalty of removal from office and bar him from running for any other high office. With a two-thirds vote needed for a finding of guilt, it is widely expected that the president will be acquitted.
The prosecution managers and administration lawyers will field another day of questions from the Senators on Thursday, then proceed to voting on other trial matters Friday.
At the Close, Wednesday, January 29, 2020:
Dow Jones Industrial Average: 28,734.45, +11.60 (+0.04%)
NASDAQ: 9,275.16, +5.48 (+0.06%)
S&P 500: 3,273.40, -2.84 (-0.09%)
NYSE: 13,843.81, -33.80 (-0.24%)
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