The Week on Wall Street
Heightened coronavirus fears, falling yields, and Super
Tuesday primary results sent stocks on a rollercoaster ride of sharp price swings, leaving stocks
marginally higher for the week.
The Dow Jones Industrial Average improved 1.79%; the
S&P 500, 0.61%; the Nasdaq Composite, 0.10%. Outside the U.S., developed equity markets tracked by
the MSCI EAFE Index rose 2.60%.[1][2]
A Swift Fed Decision
Wednesday morning, the Federal Reserve lowered its
short-term interest rate by 0.5% to a range of 1.00%-1.25%, making its biggest cut since 2008.
Addressing the media, Fed Chairman Jerome Powell said that the move was made to give the economy a
"meaningful" lift and "help boost household and business confidence."
The question is whether reducing borrowing costs can effectively address growing business and
consumer anxieties about shopping, traveling, and gathering.[3]
A Push
Toward Treasuries
The uncertainty on Wall Street has heightened demand for Treasury
bonds. Their yields typically fall as their prices rise, and fall they did last week. The yield on the
10-year Treasury dipped under 0.70% during Friday's market day, an all-time
low.[4]
Winter Hiring Surge Continues
The Department of
Labor's latest employment report showed companies adding 273,000 net new hires last month. Net monthly
payroll growth has averaged 243,000 since December.[5]
What's
Ahead
The Fed's 50-basis-points cut in the federal funds rate has now shifted the
sights of investors toward the European Central Bank, which is expected to make a policy announcement
on March 12. The ECB has less room to maneuver than the Fed, since its key interest rate currently
stands at -0.5%. Negative interest rates have done little to lift eurozone economies, which may
necessitate more-creative monetary policy accommodation from the ECB's new president, Christine
Lagarde.
Traders are also focused on whether the Federal Reserve will make another rate cut
on March 18, when its next meeting concludes. The half-point rate cut this past week did little to
soothe stock market concerns; opinions vary about what the central bank might choose to do
next.[6]
THE WEEK AHEAD: KEY ECONOMIC
DATA
Wednesday: The Census Bureau publishes a new Consumer Price
Index, showing monthly and yearly inflation.
Friday: The University of Michigan
presents its initial Consumer Sentiment Index for March, measuring consumer
confidence.
Source: MarketWatch, March 6, 2020
The MarketWatch
economic calendar lists upcoming U.S. economic data releases (including key economic indicators),
Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content
is developed from sources believed to be providing accurate information. The forecasts or
forward-looking statements are based on assumptions and may not materialize. The forecasts also are
subject to revision.
THE WEEK AHEAD: COMPANIES REPORTING
EARNINGS
Monday: Thor Industries (THO)
Tuesday:
Dick's Sporting Goods (DKS)
Thursday: Adobe (ADBE), Broadcom (AVGO), Dollar
General (DG), Oracle (ORCL), Ulta Beauty (ULTA)
Source: Zacks, March 6,
2020
Companies mentioned are for informational purposes only. It should not be
considered a solicitation for the purchase or sale of the securities. Any investment should be
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