Markets are looking up this morning as of 8:00 am ET, as both US futures and European markets are all green. Asian markets reacted negatively to yesterday’s selloff and ended the day down, led by China’s CSI at -2.34%.
Oil is up over 2% this morning after a 7% drop yesterday. Gold had a roller coaster day yesterday, swinging in and out of positive territory, and this trend is continuing again this morning, and it is presently down.
In other news, the tech-heavy NASDAQ is up over 1.5% this morning after its three-day 10% selloff. The rebound is being driven by Apple, Microsoft, Amazon, Alphabet, Tesla and Facebook, all of which combined lost $1 trillion in market value over the past three days. Apple is up over 3% and Tesla is up 6% this morning. Even after the selloff, the NASDAQ index is up over 63% since its March lows.
After the close yesterday, AstraZeneca said a late-stage trial of its Covid-19 vaccine candidate has been put on hold due to a suspected adverse reaction in a participant in the U.K. The stock is trading down in London today. In other coronavirus news, Pfizer and BioNTech reached a preliminary agreement to supply 200 million doses of their experimental Covid-19 vaccine to the European Union.
SoftBank was down another 3% on Wednesday and 13% since last Thursday. If you have not been keeping up with the tech incubator and communications company, the Financial Times reported that SoftBank is the mystery “NASDAQ whale,” buying billions of dollars in call options in major tech names like Tesla, Amazon, Microsoft and Netflix, potentially driving up valuations in the sector.
Mortgage applications for home purchases increased by 3% last week on the previous week, and were a stunning 40% higher from a year ago, according to the Mortgage Bankers’ Association. A 30-year mortgage is now under 3.1% and a 15-year is around 2.6%.
In ETFs, Volumes were elevated yesterday, but I was surprised when I noticed that overall market volume was lower than what we saw last Thursday and Friday. And that coincided with SPY’s volume of 114 million shares traded yesterday and QQQ’s 99 million. Both funds still traded almost double their volume last Wednesday.
Emerging markets were active yesterday. We saw moves out of Vanguard’s Total World Stock ETF VT and into BlackRock’s EEM and IEMG. All three funds traded above their 30-day average.
Sector plays saw sellers in XLF (Financials) while trading 84 million shares. There were also sellers in XLP (Consumer Staples), XLE (Energy), XLU (Utilities) and XLC (Communications).
A couple of funds that saw selling yesterday, after seeing inflows for weeks, were ProShares Short S&P 500 SPXU and their Short QQQ SQQQ.
We saw continued selling in longer-term fixed income going into short-term funds such as JPST, MINT, VCSH and NEAR. High yield also continued to see elevated volumes as well as sellers yesterday.
Something that might have been overlooked over the past few days were the inflows into value funds. Bloomberg published an article about this. BlackRock’s VLUE had its best week of inflows ever last week and IWD (Russell 1000 Value) had its best week in months.