The Market Bull – January 24, 2020
The major averages struggle in late trade closing with large losses as fears over the rapid spread of the Chinese flu spook the markets. For the week the Standard and Poors 500 Index slipped 26 points or .78% while the NASDAQ fell 46 points or .5%.
Regional and state level employment data softened in December with 4 regions reporting no employment gains for the month. The West South-Central region was the only one to mark a decent gain for the month advancing .2%. The Pacific, Mountain, South Atlantic and East North Central regions all advanced .1%. For 2019 as a whole the Mountain region showed the strongest employment gains up 2.3% followed by the West South Central +2.1% and Pacific up 1.8%. One month does not make a trend and 2019 certainly finished well so with a little luck employment growth will continue into 2020.
After rising fairly steadily through the end of 2019 the Fed’s repo market activity started to taper off as 2020 got underway with the latest figures showing an outstanding balance of 186 billion for the week of January 22nd. While considerably lower than the January 1st peak the Fed’s balance sheet looks to be leveling off at 4.146 trillion. Interestingly while the Fed snaps up Treasury notes and bonds it continues to allow agency mortgage backed securities to roll off at maturity. Still the why and to whom aspect of this remains a mystery. Something the reported 1.3 trillion in excess bank reserves only adds to too.
Standard and Poors 500 Index closed at: 3,295.47 down 30.07
NASDAQ finished the day: 9,314.91 down 87.57
Gold ended trading at: $1,571.30 up $5.90