Market Falls On Weak Data And Virus Fears

The first trading month of 2020 is closing out with a thud. For the second time this week, the DOW has fallen over 500 points, triggering a new red weekly Trade Triangle indicating that a move to a sidelines position may be in order. To add to that, with today's losses, the DOW is having its worst day since Oct. 2nd and has erased its monthly gains booking its first January loss since 2016, standing at -.6%.

As we head into afternoon trading, the DOW and S&P 500 will post a weekly loss of over -2%. However, The S&P 500 will try to hang on to a monthly gain of .+1%. The NASDAQ will lose over -1.5% on the week but will hang onto a monthly increase of +2.3%.

Manufacturing activity in the Midwest sank in January to the lowest level since December 2015, according to a survey of businesses released Friday by MNI Indicators. The Chicago Purchasing Managers Index (PMI) fell to 42.9 this month from 48.9 in December. Any reading below 50 indicates deteriorating conditions. Economists surveyed by Econoday had expected a small dip to 48.5.

China's National Health Commission confirmed on Friday that there had been 9,692 confirmed cases of the coronavirus, with 213 deaths. The World Health Organization (WHO) recognized the deadly pneumonia-like virus as a global health emergency on Thursday, citing concern that the outbreak continues to spread to other countries with weaker health systems. WHO's designation was made to help the United Nations health agency mobilize financial and political support to contain the outbreak.

The virus, which was first discovered in the Chinese city of Wuhan, has now spread to at least 18 other countries and has dampened sentiment over global economic growth.

Looking ahead, February has not been the market's best month historically and the DOW will have some work to do to get back into the green. Data from The Stock Trader's Almanac shows the S&P 500 averages a gain of just 0.1%. Investors will also face several obstacles in the new month, including worries over how the U.S. presidential election shakes out. Coronavirus fears could also persist in February.

Key Levels To Watch Next Week:

Every Success,
Jeremy Lutz
INO.com and MarketClub.com

One thought on “Market Falls On Weak Data And Virus Fears

  1. best we have is to STAY and hold on , and not change , sell, etc this will all come back, same with the so called impeachment of your President. By mid April all will see the market go WILD, yet in less than a week from today in Feb 7 2020 one will be surprised at the switch !!!

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