Market Insights 2/11/2020

Two days into a slow news week, markets continue to push higher, but a rally to start the day lost steam, leaving equities with mostly modest gains.

Markets were focused on today’s start of Federal Reserve Chairman Jerome Powell’s two-day monetary policy testimony on Capitol Hill, in which the Chairman reiterated the central bank’s stance that rates are unlikely to change in the near future, but that the Fed is monitoring developments surrounding the coronavirus.

Treasuries, the U.S. dollar, and gold were lower on the day. Oil prices rose and international equities moved higher.

The Markets…

The Dow Jones Industrial Average was flat at 29,276

The S&P 500 rose 5 points (0.2%) to 3,358

The NASDAQ added 11 points (0.1%) to 9,639

835 million shares were traded on the NYSE and 2.4 billion shares changed hands on the NASDAQ

WTI oil was up $0.37 to $49.94 per barrel and wholesale gasoline was down $0.01 to $1.51 per gallon

The Bloomberg gold spot price shed $9.40 to $1,570.10 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.1% to 98.75

Small business optimism improves, Fed Chief reiterates stance in Congressional testimony

The National Federation of Independent Business (NFIB) Small Business Optimism Index for January improved to 104.3, from December’s 102.7 level, and compared to the Bloomberg expectation of an increase to 103.5. The NFIB said the index started the New Year in the top 10% of all readings in the 46-year history of the survey, with six of the ten components improving, two declining, and two that were unchanged.

Treasuries were lower, with the yield on the 2-year note rising 2 basis points to 1.42%, the yield on the 10-year note gaining 2 bps to 1.59%, and the 30-year bond rate also adding 2 bps to 2.06%.

The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, fell to 6.4 million jobs available to be filled in December, from November’s 6.8 million figure and below forecasts calling for 6.9 million. The report showed hires and separations were little changed for the final month of 2018.

Global equities move higher

Global equities finished higher after showing some resiliency amid festering uncertainty regarding the economic impact of the spreading coronavirus.

U.K. GDP data showed the nation barely avoiding economic contraction with 0.0% growth in Q4. Year-over-year the U.K. economy grew 1.1%. The euro and British pound were higher versus the U.S. dollar, while the yen was flat.

The markets shrugged off some political uncertainty in the region following the weekend’s Irish general election that suggested the possibility of no outright majority and amid calls for a confidence vote in Italy, while uncertainty resurfaced regarding potential leadership changes in Germany.

The U.K. FTSE 100 Index, France’s CAC-40 Index, Italy’s FTSE MIB Index and Spain’s IBEX 35 Index were all up 0.7%, Germany’s DAX Index rose 1.0%, and Switzerland’s Swiss Market Index increased 0.6%.

China’s Shanghai Composite Index increased 0.4%, while the Hong Kong Hang Seng Index gained 1.3%. South Korea’s Kospi Index advanced 1.0%, while Australia’s S&P/ASX 200 Index and India’s S&P BSE Sensex 30 Index both moved 0.6% higher. Japanese markets were closed for a holiday.