Sit Fixed Income Advisors’ Bryce Doty discusses the declining yields on U.S. Treasuries as Apple and Walmart are seemingly affected by the coronavirus outbreak.
U.S. equity markets were slightly lower as traders digested a rate cut by the People’s Bank of China and the biggest takeover by a Wall Street bank since the financial crisis.
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The early selling had the S&P 500 and the Nasdaq Composite slipping off record highs set on Wednesday.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SP500 | S&P 500 | 3388.14 | +1.99 | +0.06% |
| I:DJI | DOW JONES AVERAGES | 29348.56 | +0.53 | +0.00% |
| I:COMP | NASDAQ COMPOSITE INDEX | 9817.726967 | +0.55 | +0.01% |
Overnight, the People’s Bank of China cut its loan prime rate 10 basis points to 4.05 percent in a move designed to help cushion the Chinese economy from the damage caused by coronavirus outbreak.
China’s National Health Commission said Thursday that at least 74,576 people in the country have been sickened by the coronavirus outbreak, which has killed 2,118. The number of cases in South Korea, which reported its first death due to the virus, more than doubled to 82.
Morgan Stanley reached a deal to buy online broker E-Trade for $13 billion in stock, marking the largest takeover by a Wall Street bank since the financial crisis.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ETFC | E*TRADE GROUP (E*TRADE BANK AG) | 56.10 | +11.17 | +24.86% |
| MS | MORGAN STANLEY | 54.37 | -1.94 | -3.45% |
Elsewhere, the private-equity firm Sycamore Partners has agreed to buy a controlling stake in L Brands’ Victoria’s Secret for $525 million. Chairman and CEO Leslie Wexner will step aside once the deal is completed.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LB | L BRANDS INC. | 24.33 | +0.03 | +0.12% |
Meanwhile, shares of space-tourism venture Virgin Galactic were higher for a ninth straight day, adding to their 223 percent year-to-date gain.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SPCE | VIRGIN GALACTIC HOLDINGS INC. | 40.84 | +3.49 | +9.35% |
On the earnings front, ViacomCBS posted a 3 percent drop in revenue in its first earnings report since the two media companies merged late last year.
Norwegian Cruise Line Holdings reported better-than-expected fourth-quarter results and warned the coronavirus outbreak will put a dent in its bottom line.
Six Flags Entertainment lost $11.2 million in the fourth-quarter as park admissions, spending on food and merchandise and sponsorships declined.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| VIAC | VIACOMCBS INC. | 30.21 | -5.46 | -15.31% |
| NCLH | NORWEGIAN CRUISE LINE HOLDINGS LTD. | 50.12 | -1.90 | -3.65% |
| SIX | SIX FLAGS ENTERTAINMENT | 31.47 | -6.55 | -17.23% |
Looking at commodities, gold was up 0.6 percent at $1,621 an ounce, its highest in almost seven years, and West Texas Intermediate crude oil gained 0.6 percent to $53.80 a barrel.
U.S. Treasurys rallied, pushing the yield on the 10-year note down 3.6 basis points to 1.534 percent.
In Europe, Britain’s FTSE was up 1 percent while Germany’s DAX and France’s CAC were both lower by 0.2 percent.
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Asian markets ended mixed with China’s Shanghai Composite gaining 1.8 percent and Japan’s Nikkei adding 0.3 percent. Hong Kong’s Hang Seng slid 0.2 percent.
