Stocks are fighting to recover some of the losses taken over the past couple of trading days with the Dow Jones up about 250 points in early morning trading. This is far from the nearly 1,900 points lost in the Dow over the past two days. However, it’s nice to see stocks at least stable at the moment. We will have to see how the market responds from here. It’s too early to say if stocks will continue to recover or if this is a “dead cat bounce” where stocks briefly recover only to resume their path lower.
President Trump is expected to speak today regarding the coronavirus and its impact to America. It is widely believed that he will be asking people to shrug off the concerns and that it will not be as big of a deal as many are making it out to be. It will be interesting to see how the stock market responds to the message. Given investors’ desire to profit and grow assets, I expect the stock market to react favorably to his message. This could pull money out of the bond market if investors feel it is safe.
With bond prices unable to break above the current ceiling, we are now going to switch to a locking bias.