Selling Widespread, Losses Were Pared into the Close

Selling Widespread, Losses Were Pared into the Close

$DIA $SPY $QQQ $RUTX, $USO, $XAU, $USD, $VXX

Despite the coordinated stimulus packages announced by central banks and the massive stimulus plans laid out by Washington, confidence was lacking due to the growing outbreak of COVID-19 and the continued shutdown of the economy.

Shortly before the close, the Senate passed the House bill that provides unemployment and sick leave benefits.

Selling was widespread and was made most pronounced in the cyclical energy (-14.3%), financials (-8.7%), and industrials (-7.2%) sectors.

The energy space was hammered by the 24.4% collapse in WTI Crude Oil (20.42bbl, -6.06), which fell to its lowest level since Y 2002. The communication services sector (-2.8%) declined the least today.

As part of the proposed $1-T stimulus package, the Treasury Department clarified today it would seek $300-B for small business interruption and a secured lending facility of $50-B for airlines. Separately, the FHFA announced the suspension of foreclosures and evictions for 60 days for enterprise-backed mortgages.

New measures taken to contain the virus included the closure of the US-Canadian border for non-essential traffic and President Trump invoking the Defense Production Act, which gives the White House the right to require companies to manufacture medical supplies in short supply.

Gold finished at 1516.40 oz, -8.46, -0.6%

US Treasuries’ losses suggest that many investors were raising cash in these uncertain times. Longer-dated maturities remained under heavy selling pressure amid the view that more debt will be needed for the massive fiscal stimulus plans. 

The 2-yr yield rose 7 bpts to 0.52%, and the 10-yr rose 27 bpts to 1.27%. The US Dollar (.DXY) Index rose 1.4% to 100.97.

Wednesday, the major US stock market indexes finished at: DJIA -1338.40 at 19898.98, NAS Comp -344.94 at 6989.20, S&P 500 -131.09 at 2398.10

Volume: Trade on the NYSE came in at 1.9-B/shares exchanged

  • NAS Comp YTD: -22.1%
  • S&P 500 YTD: -25.8%
  • DJIA YTD: -30.3%
  • Russell 2000: -40.6%

HeffX-LTN’s overall technical outlook for the major US stock market indexes is Very Bearish in here.

Looking Ahead: Investors will receive the weekly Initial Claims and Continuing Claims report, the Q-4 Current Account Balance, and the Philadelphia Fed Index for March Thursday. 

Have a healthy day.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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