We headed into Friday afternoon off the lows of the session but still down for the shortened trading week after coronavirus cases escalated, which in turn has the stock market worried about a pronounced global economic slowdown. China's National Health Commission reported more than 2,000 deaths in the mainland, with 75,00 confirmed cases. That news is a jump of 800 new cases overnight. South Korea also said 52 new cases on Thursday, making its total cases 150.
All three major indexes will end the week in negative territory with the S&P 500 losing roughly -1%, the DOW is down -1.3%, and the NASDAQ is sitting right below the -1% mark at -.98%.
Adding to the economic worries were falling existing home sales and a less than stellar IHS Markit U.S. composite purchasing managers' index (PMI) report.
Existing home sales fell by -1.3% to a seasonally adjusted annual rate of 5.46 million in January, as reported by the National Association of Realtors. This number beat the consensus expectations for a decline of -1.8% to a seasonally adjusted annual rate of 5.44 million. In December, existing-home sales registered at 5.53 million.
The PMI dropped below expectations and into contractionary territory in February. The weakness was led by a slump in the U.S. services sector, as the coronavirus outbreak hit travel and tourism-related industries. The composite PMI registered at 49.6 for February, coming in well below the print of 53.3 from January and marking the lowest level in seven years. Readings below the neutral level of 50 indicate contraction. Within the composite print, the manufacturing PMI came in at a six-month low of 50.8, below expectations for 51.5. The service sector PMI slumped to a more than six-year low of 49.4. Consensus economist had expected this to come in at 53.4, which would have matched January's level.
In turn, this has caused gold prices to jump over +1% on the day in a flight to safe-haven assets as coronavirus fears mount. At more than $1,652 an ounce, gold was trading at its highest level since March 2013. Gold is on track for its best week in eight months as of intraday trading Friday gaining +3.7%.
Key Levels To Watch Next Week:
- S&P 500 (CME:SP500): 3,235.66
- Dow (INDEX:DJI): 28,319.65
- NASDAQ (NASDAQ:COMP): 9,188.55
- U.S. Dollar (ICE:DX): 97.40
- Gold (NYMEX:GC.J20): 1,608.40
- Crude Oil (NYMEX:CL.H20): 51.93
- Bitcoin (BITCOIN:BITSTAMPUSD): 9,075.00