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Alice Blue - Market Talk_Jan 22, 2020

Banks led a slide in U.S. stocks Tuesday as a virus outbreak in China – Morning Talk – Wednesday, January 22

Banks led a slide in US stocks on Tuesday, triggering a virus outbreak in China in global markets, prompting investors to transfer assets to bonds and defense sector companies.

The sell-off drew a three-day winning streak by the S&P 500. The benchmark index ended last week at an all-time high.

The sell-off in US stocks led to losses in the Asian and European markets as investors worried that new coronoviruses spreading to the world’s second-largest economy could hurt tourism and ultimately economic growth and corporate profits.

Six people have died, and 291 have been infected in China, just as people in the country were preparing to make billions of trips for the Lunar New Year travel season. And a US citizen, who had recently returned from China, had detected the new virus in the Seattle area, making the United States the fifth country to report a case after China, Thailand, Japan and South Korea.

Within the S&P 500, stocks of American companies that cater to Chinese tourists suffered some of the biggest losses, as well as general travel companies, such as casinos and airlines. Along with banks, industrial and energy stocks accounted for a large share of sales. Those losses were compensated by real estate stocks, utilities and household goods companies. Traders also transferred money to US government bonds, sending less money.

US Market

The S&P 500 fell 8.83 points or 0.3% to 3,320.79 points. It had fallen by 0.4% in the first day.

The Dow Jones Industrial Average closed down 152.06 points or 0.5% at 29,196.04. The Nasdaq Composite slipped 18.14 points or 0.2% to close at 9,370.81.

The shares of the small-company took the brunt of the sell-off. The Russell 2000 index lost 13.74 points, or 0.8%, to 1,685.90.

The holiday started on the first trading day of the week, with trading beginning in the Asian markets overnight and a fall in Europe. China confirmed the fears of many people late Monday when a government expert said that new types of coronaviruses affecting the country could transmit from human to human, increasing its potential spread.

Las Vegas Sands fell 5.4% and Wynn Resorts fell 6.1% to the two biggest losses in the S&P 500. Both casino companies receive the majority of their revenue from Macau on the southern coast of China.

US companies are in the midst of reporting their earnings results for the last three months of 2019, and early signs are encouraging. Less than a tenth of S&P 500 companies have reported their results so far, but 72% of those analysts forecast for profits. According to Factorset, the S&P 500 profit was lower for the fourth consecutive time, with analysts saying the forecasts were lower.

The aircraft manufacturer said Boeing’s shares had fallen by 3.3% because it does not expect the Federal Regulators to approve changes to the grounded 737 MAX by this summer – several months longer than the company was only a few weeks earlier Were saying

Oil and Gas

Benchmark US crude fell 20 cents to $ 58.34 a barrel. International standard Brent crude fell 61 cents to close at $ 64.59 a barrel.

Wholesale gasoline was unchanged at $ 1.64 per gallon, while heating oil was down 2 cents to $ 1.83 per gallon.

Natural gas dropped 10 cents or 5.4% to $ 1.90 per 1,000 cubic feet. The sharp fall was on the energy sector stocks. Cabot Oil & Gas, which derives most of its revenue from gas, led the slide, losing 7.8%. It was also the biggest drop in the S&P 500.

Gold fell $ 2.40 to $ 1,556.40 an ounce, silver fell 26 cents to $ 17.75 an ounce and copper fell 5 cents to $ 2.80 a pound.

The dollar fell from 110.87 yen to 109.81 Japanese yen on Monday. The euro strengthened from $ 1.1092 to $ 1.1095

 

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About Dwipen Gogoi

Dwipen Gogoi, MBA (IB and IT) and PGDFT from Pune. (Technical Analyst of AliceBlue) I am a You Tuber, Blogger and doing Technical Analysis last 10 years in Stock, Commodity and Forex Market. i am creating various trading strategies for day traders, swing traders, scalp traders.

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