Market Insights 2/18/2020

U.S. equities finished mostly lower with the NASDAQ being the only major index in the green.

The tech-heavy index overcame weakness stemming from disappointing guidance from its largest constituent, Apple. The tech giant warned that supply chain disruptions from the coronavirus outbreak were constraining the supply of iPhones. Walmart posted Q4 results that topped expectations for earnings, but fell short on revenues.

Treasury yields were lower. Economic data provided a better-than-expected read on regional manufacturing and showed strong homebuilder sentiment.

The U.S. dollar was higher, along with gold on bids for safety. Crude oil prices fell and global equities finished mostly lower.

The Markets…

The Dow Jones Industrial Average was down 166 points (0.6%) to 29,232

The S&P 500 fell 11 points (0.3%) to 3,370

The NASDAQ was up 2 points to 9,733

916 million shares were traded on the NYSE and 2.2 billion shares changed hands on the NASDAQ

WTI oil was flat at $52.05 per barrel and wholesale gasoline added $0.03 to $1.61 per gallon

The Bloomberg gold spot price added $17.20 to $1,603.60 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.4% to 99.43

Regional manufacturing and housing data kick off the economic week

The Empire Manufacturing Index, a measure of activity in the New York region, moved further into a level depicting expansion (above zero) for February, rising to 12.9 from the 4.8 level posted in January, and north of the FactSet forecast of 5.0. New orders and shipments rose sharply and inventories increased significantly, though employment expanded only modestly.

Treasuries were higher, with the yield on the 2-year note declining 2 basis points (bps) to 1.41%, the yield on the 10-year note dropping 3 bps to 1.56%, and the 30-year bond rate falling 3 bps to 2.01%.

The National Association of Home Builders (NAHB) Housing Market Index showed homebuilder sentiment in February dipped to 74 from January’s unrevised 75 level, where it was expected to remain, with a level of 50 separating good and poor conditions.

Global equities mostly lower

Global equities finished mostly lower, with the uncertainty regarding the global impact of the coronavirus outbreak continuing to weigh on sentiment. The euro was lower versus the U.S. dollar, while the British pound and Japanese yen traded higher. Global bond yields were mostly lower, though some peripheral Eurozone countries saw higher rates.

As for the major global indexes: the U.K. FTSE 100 Index was down 0.7%, France’s CAC-40 Index decreased 0.5%, Germany’s DAX Index declined 0.8%, and Spain’s IBEX 35 Index and Switzerland’s Swiss Market Index dipped 0.2%, while Italy’s FTSE MIB Index was 0.4% higher.

Mainland Chinese stocks overcame an early decline and finished modestly higher with the Shanghai Composite Index posting a gain of 0.1%. Japan’s Nikkei 225 Index fell 1.4%. The Hong Kong Hang Seng Index dropped 1.5%. Australia’s S&P/ASX 200 Index dipped 0.2%. South Korea’s Kospi Index traded 1.5% lower and India’s S&P BSE Sensex 30 Index decreased 0.4%.