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how the stock market has preform.
At the bottom of this post are the all-time numbers since the current
alert was
made. The current bullish alert is moving in the right direction.
Market Direction: BEARISH alert issued 2/27/2020
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U.S. stocks on
Wednesday finished well off their best levels and the Nasdaq turned negative in
the final minutes of trade, as the passage of a $2 trillion economic rescue
package appeared to hit a snag.
How did benchmarks
perform?
The Dow Jones
Industrial Average DJIA, +2.39% rose
495.64 points, or 2.4%, to settle at 21,200.55. The S&P 500 SPX, +1.15% rose
28.23 points, or 1.2%, to end at 2,475.56. The Nasdaq Composite COMP, -0.45% turned
negative, finishing down 33.56 points, or 0.5%, at 7,384.30.
The move for the Dow
marked its first successive gains since Feb. 6, while the S&P 500
registered its first consecutive gains since the period ended Feb. 12.
From its recent
records, the Dow is down 28.3% from its Feb. 12 closing peak, the S&P 500
was around 27% from its recent high, and the technology-heavy Nasdaq was off
25%.
What drove the market?
A quartet of Senators
opposed aspects of the coronavirus bill, which appeared to cause the stock
market to stumble badly in its final stage of trading on Wednesday.
Progress on a U.S.
fiscal stimulus package has been credited with providing some lift to
beaten-down stocks over the past two sessions, as investors have worried about
the depth of the coming recession and the rising death toll from the world-wide
coronavirus pandemic that has infected 425,000 people and killed more than
20,000, as of Wednesday.
However, late Wednesday, Sen. Bernie Sanders of Vermont,
who is seeking the Democratic presidential nomination, said he would put a
hold on the bill unless Republican senators dropped their
objections. And Republican senators, including Ben Sasse of Nebraska,
identified what they said may be an error in the bill involving unemployment
benefits.
The
Senate had planned to vote on the rescue bill later Wednesday, Senate Majority Leader
Mitch McConnell said in remarks on the Senate floor. The
Senator opposition casts some doubt on the quick passage of the important piece
of legislation intended to aid workers and companies that will be hurt by
extended closures to prevent the spread of the deadly infection.
The text of the bill hasn’t been released but
it is expected to provide $1,200 direct payments to many Americans; offer more
than $360 billion in loans to small businesses; and set up a $500 billion fund
to lend to industries, cities and states. The package also would expand
unemployment insurance, offer hundreds in billions worth of loans to both small
and large businesses and extend additional resources to health-care providers,
the Wall Street Journal reported.
“The coronavirus spread is intensifying in the
US, but some optimism is growing that it could peak in a few weeks and right
now traders are primarily focused on all this stimulus,” wrote Edward Moya,
senior market analyst at Oanda in a Wednesday note.
However, some investors are expecting any
rebound in the market to take some time to take shape.
“The earliest time frame for when you can
expect a bounceback is in the fourth-quarter, but that presupposes the
[epidemic] curve is on the right side. The problem is we don’t have the health
angle perfectly worked out,” said Alicia Levine, chief strategist at BNY Mellon
Investment Management, referring to hopes that the pace of the virus’ spread in
the U.S. would start to slow.
Levine said uncertainty exists around the
domestic trajectory of the coronavirus, which analysts say is closer to
following the path of the worst-hit countries like Italy and Spain, instead of
Asian economies like South Korea, which more successfully limited the spread of
the virus.
“By any measure this is a huge stimulus
package,” said James McCann, senior global economist at Aberdeen Standard
Investments. “One thing that it cannot stop is the recession that is coming.
But it should hopefully act as a firewall to slow the spread of this crisis
through the economy and prevent it from seizing up the financial system.”
In
U.S. economics reports, durable goods
orders jumped 1.2% in February, mostly because of big increase
in bookings for new autos. Economists polled by MarketWatch had forecast no
change.
How did other markets trade?
In bond markets,
the yield on the 10-year U.S. Treasury note TMUBMUSD10Y, 0.808% rose
4.1 basis points to 0.854%.
Crude oil rose,
with the price of a barrel of West Texas Intermediate crude CL.1, -3.062% settled
up 48 cents, or 2%, at $24.49 a barrel on the New York Mercantile Exchange. In
precious metals, April gold GCJ20, -0.557% settled 1.7% lower at
$1,633.40 an ounce, a day after surging 6%.
The
Stoxx Europe 600 SXXP, -1.474% closed
3.1% higher.
In
Asia overnight, stocks ended sharply higher, with the China CSI 300 000300, -0.65% rising
2.7%, Hong Kong’s Hang Seng Index HSI, -0.74% adding
3.8% and Japan’s Nikkei 225 NIK, -4.51% surging
8% after an 7.1% gain the previous session.
The
U.S. dollar traded lower on Wednesday, compared with a basket of its major peers.
The ICE U.S. dollar index DXY, -0.630% was
down 1.1%.
How did other companies trade?
Shares
of Boeing Co. BA, +24.31% surged
24.3% as it is in line to receive government aid, as the aerospace industry has
been hit hard by the COVID-19 pandemic, but Boeing Chief Executive Dave Calhoun
said Tuesday he wasn’t willing to take a bailout if it meant giving the
government an equity stake. Gains from the Dow component contributed the lion’s
share of the blue-chip index’s Wednesday advance.
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The all-time lows since our initial
recommendation to go SHORT
this market. Here is how the markets have performed:
Stock Market
Direction Recommendation (2/27/2020)
|
||
Dow
|
down 7,552.39 points a 29.31% gain
|
3/23/20
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Nasdaq
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down 1,935.06 points a 22.59% gain
|
3/23/20
|
S&P 500
|
down 786.90 points a 26.42% gain
|
3/23/20
|
Related Link: http://www.stockmarket-direction.com/
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