US futures are mixed this morning after all three major indexes closed down yesterday, while markets in Europe are mostly down on fears of a coronavirus spike. Asia saw gains overnight, led by China’s CSI 300 at 2.2%. Oil is up this morning and is up by 10% for the week so far. Gold is also up and is looking to end the week with a slight gain.
In other news, Covid-19 cases have passed 30 million globally according to Johns Hopkins University, led by the US, India and Brazil. Europe is seeing a surge in cases and this is starting to weigh on markets. Several European countries are considering new restrictions.
The Dow snapped a four-day winning streak on Thursday and was down 0.47%, while the S&P was down 0.84% and NASDAQ was off 1.3%. Amazon, Microsoft, Facebook and Apple have all dropped at least 10% this month.
Oil is looking at its best week since June. Yesterday’s OPEC meeting had a lot to do with the gains. Saudi Arabia increased pressure on its fellow members to deliver on promised output cuts.
Reuters this morning reported that President Trump will be blocking users of TikTok and WeChat in the US starting on Sunday. The apps will be “de-platformed”. Oracle’s stock is down in the premarket on the news, while Twitter, SnapChat and Facebook are all up.
Today is quadruple witching day, as options and futures on indexes and equities expire.
As we approach the end of the quarter, some ETFs and ETF models are starting to rebalance. This makes it a good time to look at your holdings in ETFs and models for any potential changes.
We have seen an uptick in volume every day this week in the overall market. SPY traded 91 million shares yesterday, 25 million more than Monday. QQQ traded 81 million shares, 44 million more than Monday.
Vanguard saw activity in many of its funds as VOX (Communications), VDC (Consumer Staples), VCR (Consumer Discretionary), EDV (Extended Duration Treasury), VOE (Mid-Cap Value) and VFH (Financials) all traded above average.
The SPDR Russell 1000 Momentum (ONEO) saw sellers while trading over 1.6 million shares. Also seeing sellers was the SPDR Russell 1000 Low Volatility (ONEV), trading 1.1 million shares. Combined, this was over $200 million notionally.
Single-country funds EWU (United Kingdom), EWW (Mexico) and EWJ (Japan) all traded above average yesterday. If you do not remember, both the UK and Japan’s central banks released their latest updates yesterday.
There was activity in the ProShares QQQ products. Both TQQQ (3x QQQ) and SQQQ (3x Short QQQ) traded above average.
IEZ (US Oil Equipment) traded over 6 million shares, 10x average. This appeared to be sellers.
We mentioned how we have seen buyers of emerging market bond funds recently. Yesterday the Wall Street Journal published an article on the very subject. It said: “The collapse of bond yields in Europe and the US is driving investors back into battered emerging markets, fueling gains despite a series of high-profile defaults and concerns about the pandemic’s blow to fragile economies.”
The article continued: “Individuals and institutions have put money into emerging-market bond funds for 10 weeks in a row starting in early July, the longest such stretch since late 2017, according to EPFR Global data. The bulk of the money came in three weeks spanning late August and early September, when net inflows hit about $8 billion.”