Equity Markets plunged around the world, oil tumbled and the stress in U.S. credit markets deepened after the World Health Organization called the virus spread a pandemic and the Trump administration remained unable to detail any stimulus measures to combat the economic fallout. The latest bout of virus-fomented turmoil tipped Dow Jones Industrial Average into a bear market, ending the longest bull run in the history of American equities. The blue-chip slumped 5.9% Wednesday and ended 20% below its February closing record. The S&P 500 dipped into bear territory before closing 19% below its high. The WHO declaration and no comments on stimulus from President Donald Trump rattled markets. Trump said late in the market session that he’d make a statement Wednesday night on the administrations plans. European officials signalled a growing willingness to move soon to combat the virus’s effects on the region’s economy.
Signs that companies in the hardest-hit industries were drawing down credit lines to battle the effects of the virus on their businesses added to anxiety.
Here are the main moves in global markets:
- Private equity titan Blackstone Group Inc. asked companies it controls to draw downtheir bank credit lines to help prevent any liquidity shortfalls.
- All but 10 stocks in the S&P 500 retreated Wednesday, with every industry down at least 3.9%.
- Boeingplunged 18% after it said it plans to draw down all of a $13.8 billion loan. Hilton Worldwide lost 9% when it said it would draw some of its credit line.
- An index of consumer services providers that includes hotels, cruise operators, Starbucks and Chipotle plunged 8.3%.
- European equities wiped out a 2.3% advance sparked by an emergency rate cut in the U.K.
- Municipal bondstumbled, sending rates on 10-year benchmark state and local government debt higher by 22 basis points, the most since records began in 2011.
- The yen surged 1%, while the euro advanced with the pound.
- Crude sank 4.2% to sink below $33 a barrel.
- Asian equities lost 1.7%.
Meanwhile, Joe Biden cemented his position as front-runner for the U.S. Democratic presidential nomination with primary victories Tuesday, further easing concerns among those opposing Bernie Sanders’s progressive platform. Just as I go to press President Donald Trump said he will suspend all travel from Europe to the U.S. for the next 30 days, the most far-reaching measure yet in the administration’s efforts to combat the spread of Coronavirus. Trump, speaking early this morning from the Oval Office, said the restrictions, which won’t apply to the U.K., will go into effect Friday at midnight. He blamed the European Union for not curbing travel from China in the early days of the outbreak, and credited his own measures with having limited the number of cases in the U.S.
“The European Union failed to take the same precautions and restrict travel from China and other hot spots,” Trump said. As a result, “clusters” of infection in the U.S. “were seeded by” European travelers, he added.
To mark my 2025th issue of TraderNoble Daily Commentary I am offering a special 2 year rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day To demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it made 1135 points yesterday and is now ahead by 3072 points for March, having made 2223 points in February, 2142 points in January, 818 points in December, 780 points in November, 1649 points in October, 1620 points in September and 2387 points in August Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
U.S. stocks extended their three-week slide as investors grappled with the potential economic hit from the virus that is upending daily routines around the world. Policy makers are seeking to assure traders they’re on alert, with the ECB indicating it may move as soon as this afternoon, the Bank of England cutting rates and German Chancellor Angela Merkel pledging to do “whatever is necessary” to bolster the economy.
In the U.S., the Trump administration continues to promise “major” stimulus, but details remain uncertain. Democrats plan to urge the president to declare a national state of emergency. Markets are now growing worried that whatever does come will not have the ability to stave off a major blow to the world’s largest economy.
The S&P closed 4.9% lower at 2741.
The Dow Jones Industrial Average closed a massive 5.86% lower for a 1465 point decline at 23,553.
The NASDAQ fell 4.37%, closing at 8006.
Hang Seng Futures lost 1%.
Futures on Australia’s S&P/ASX 200 Index were down 3.5%.
Bonds
The yield on 10-year Treasuries added seven basis points to 0.87%.
The Thirty- Year Bond surged to close at 1.29%
Currencies
Here is a summary of the main Changes in F.X. Markets:
The yen was at 104.47 per dollar after surging 1%.
The offshore Yuan was at 6.9711 per dollar.
The Euro bought $1.1265.
Commodities
West Texas Intermediate crude sank 4.2% to $33.00 a barrel.
Gold fell 0.8% to $1,634.25 an ounce.
This morning on the Economic Front we have Euro-Zone Industrial Production at 10.00 am and the ECB Rate Decision at 12.45 pm. At 12.30 pm we have U.S PPI and the Weekly Jobless Claims. Finally, at 1.30 pm by the ECB President Lagarde Press Conference.
March S&P 500
What another incredible trading session with the S&P closing almost 5% lower. This does not cover half the story given the huge moves up and down throughout the day. My S&P plan worked really well with the market hitting my 2785 buy level before rallying to my 2812 T/P level. Subsequently I emailed my Platinum Members to buy the S&P again at 2770 with a T/P level at 2805 and I am now flat. Although the S&P made a new low at 2702 we managed to close above Tuesday’s 2733 low which is encouraging. The market is oversold on a Daily Weekly and now Monthly basis while the Fear & Greed Index made a new low at 3, while the McClellan Oscillator closed deep in negative territory with a – 330 print. To add to this the VIX surged 13% close at a new high for the move at 53.90. The S&P Futures Market is down almost 100 Handles on Trump’s travel restrictions. It is difficult to make a call on the S&P today given this latest news. The S&P has strong support at 2650 which is been tested as I post. Today I will be a buyer from 2590/2640 with a 2555 mental stop. If I am taken long I will have a T/P level at 2705.
EUR/USD
Unfortunately, the Euro just missed my 1.1370 sell level with a high of 1.1366 before the market got hit to close at 1.1260. The Euro is rallying as I post and I will now raise my sell level to 1.1405/1.1465 with a 1.1505 stop as we wait for this afternoon’s key rated decision from the ECB. Even with Interest Rates deep in negative territory I do expect the ECB to follow the Bank of England and the Fed by cutting rates further.
March Dollar Index
The Dollar just missed my 95.90 buy level and I am still flat. Today I will leave my 95.50/95.90 buy level unchanged with the same 94.95 stop. If I am taken long I will have a T/P level at 96.25.
March DAX
My DAX plan worked well with the market hitting my 10480 buy level before rallying to my 10600 T/P level and I am now flat. Given how oversold the DAX is trading I will continue to be a buyer on dips. As I go to press the DAX is trading 500 points lower on the Grey Market.Today I will be a small buyer from 9650/9800 with a 9555 stop. If I am taken long I will have a T/P level at 9980.
March FTSE
Shortly after I posted the FTSE traded lower to my 5840 buy level before rallying to my 5880 T/P level and I am still flat. Looking at the Monthly Chart the FTSE has strong support at 5560. This level must hold or else we could see a further acceleration to the downside. Today I will have a buy level from 5420/5550 with a 5360 stop.
Dow Rolling Contract
The volatility in the Dow is astonishing with 1000 points moves a few times every day. This is incredible. The good part is the two-way volatility gives you plenty of opportunities to make points. Yesterday’s Dow plan worked well with the market trading lower to my 24280 buy level before rallying to my 24470 T/P level and I am now flat. Thankfully we had no second buy level in the Dow as the market got slammed to a new low for this move at 23300 before having a small rally into the close. As I go to press the Dow has already moved 1200 points lower from its 23871 overnight high. Looking at the Monthly Chart, the Dow is trading below the bottom of its Monthly Bollinger Band for the first time since December 2014. This gives you an idea of oversold we have gotten. The Dow has nearby support from 22100/22400 and I will be a buyer on any dip to this area with a 21950 mental stop. If I am taken long I will have a T/P level at 22905.
March NASDAQ
Very late yesterday the NASDAQ traded the whole of my buy range for a 7940 average long position. Subsequently after the Futures Market re-opened we rallied to my 8105 T/P level and I am now flat. The NASDAQ has good support from 7620/7710 and I will be a buyer in this area with a 7560 stop. If I am taken long I will have a T/P level at 7900.
June BUND
It looks like Monday’s 98% DSI reading for the Bond has market the top given the level of sell-off since. I am still flat the Bund and ahead of today’s ECB Meeting I am going to stay flat and wait until tomorrow for a new view.
Gold Rolling Contract
Unfortunately, Gold just missed my 1678 sell level before falling $40 and I am still flat. Today I will lower my sell level to 1670/1685 with a 1696 stop.
Silver Rolling Contract
No change as I am still a buyer on any dip lower to 16.00/16.40 with the same 15.75 stop. If I am taken long I will have a T/P level at 16.70.
Recent Comments