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Futures are lower once again this morning as the S&P 500 is now on pace for its 7th straight day of declines. The VIX also continues to rise as it traded above 47 earlier this morning. That’s a level that hasn’t been seen since February 2018. Given the lack of precedent for events related to the Covid-19 shock, there’s just no way to know where this collapse in stocks will end even though numerous market indicators have reached levels that would suggest a bounce is overdue.
Read today’s Bespoke Morning Lineup for the latest stock-specific events, the latest on the coronavirus, and a look at some positive economic data out of Europe.
There’s been a lot of talk in the last week that political factors like the rise of Bernie Sanders in the polls have been an overlooked factor impacting the market this week. People citing this factor have pointed to the weakness in the Health Care sector this week. We’re not sure what data these people are looking at, but the Health Care sector has been one of the better-performing sectors this week. It’s also one of just four sectors that’s not down 10% week to date!
When it comes to where sectors are trading relative to their trading ranges, it doesn’t get much more oversold than things are right now. The chart below is from page two of the Morning Lineup and as you can see, all but two sectors (Technology and Utilities) are more than three standard deviations below their 50-day moving averages.