Daily Markets: Coronavirus Delivers Sharp Shift To The Markets

Daily Markets: Coronavirus Delivers Sharp Shift To The Markets

First off, after a nail biter of a game heading into half time, the Kansas City Chiefs dominated the fourth quarter to win Super Bowl LIV.  Before the game, the AFC and the NFC were tied for Super Bowl victories at 27 each. The last time both conferences had the same number of wins was back in 1990 at 12 a pop. In the prior five years when the 49ers won the Super Bowl, the S&P 500 was up for the remainder of the year every time by an average of 20.2%. The one time the Chief won the Super Bowl was in 1970 which saw the S&P 500 fall 0.3%. The one other time they made it but lost to the Packers, the S&P 500 gained 14.1% in the remainder of the year.

Before the big game, last week we closed the books on January and to say it ended on a weak note would be a bit of an understatement. Coronavirus contagion fears dominated not just the stock market, but the global economy. Last Friday stocks fell sharply, with the major US indices falling between 1.5% and 2.1%. The hit from coronavirus fears has been so profound the S&P 500, the Dow Jones Industrial Average, the NYSE Composite and the Russell 2000 were all in negative territory YTD as of Friday’s close. The Nasdaq 100 and the Nasdaq Composite remained up 3% and 2% YTD, respectively, but even that is dwarfed by the near 37% jump in the CBOE S&P 500 Volatility Index.

And for context on the sharp shift in the markets last week, consider this: a week ago, every major global equity index was at least one standard deviation above its 50-day moving average. After Friday’s close most were in oversold territory except Australia and New Zealand, which were aided by currency declines.

As the Chiefs and their fans celebrate their victory…

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About the Author

Chris Versace, Chief Investment Officer
I'm the Chief Investment Officer of Tematica Research and editor of Tematica Investing newsletter. All of that capitalizes on my near 20 years in the investment industry, nearly all of it breaking down industries and recommending stocks. In that time, I've been ranked an All Star Analyst by Zacks Investment Research and my efforts in analyzing industries, companies and equities have been recognized by both Institutional Investor and Thomson Reuters’ StarMine Monitor. In my travels, I've covered cyclicals, tech and more, which gives me a different vantage point, one that uses not only an ecosystem or food chain perspective, but one that also examines demographics, economics, psychographics and more when formulating my investment views. The question I most often get is "Are you related to…."

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