Stock Market Update Wednesday, August 14th, 2019
Well, that was fast…
Yesterday stocks rallied on good “trade war news”.
But today stocks gave up all of yesterday’s gains and then some.
Things were rough at the open and it only got worse.
After a steady decline throughout the day, the major indices were down 3.0% and the DOW was looking at its worst loss of the year.
Here’s where the major indices ended the day:
- The S&P finished with a 2.9% loss. Down 86 points, the S&P ended at 2,841.
- The DOW ended lower by 3.1%. Down 800 points, the DOW closed at 25,479.
- The NASDAQ was down 3.0%. With a 242 point loss, the NASDAQ finished at 7,774.
Crude Oil (CL) was hammered as well today. With a 3.4% loss, CL ended at $55.17 a barrel.
Today it was an inverted yield curve that jolted the markets. This phenomenon occurs when long term yields like the 10-Year Note drops below short term yields like the 2-Year Note rate. It is an indicator that often points to weak economies and recessions.
According to Credit Suisse, there have been 5 times the 2-year and 10-year yields have inverted since 1978. And every time after the inversion there was a recession. But what varies is how long it takes for a recession to occur (on average a recession occurs 22 months AFTER an inverted yield curve takes place).
The prospect of lower interest rates sent bank stocks.
JP Morgan Chase (JPM) dropped 4.2% and Bank of America (BAC) sank 4.7%.
Macy’s (M) was also a big loser today. The stock lost 13.2% after weaker than expected earnings.
Here is the economic calendar for the week:
Real Time Economic Calendar provided by Investing.com.
This Stock Market Update was provided by Rockwell Trading Services LLC.