The futures markets are well in the green this morning following a three-day decline in the broader indices. Though little economic data is expected today, eyes will be on Federal Reserve Governor Christopher Waller later today, who will give some insight into the central bank’s thinking about the outlook for interest rates and the U.S. economy. Overall, the positive move in the futures market suggests a strong start to the trading day.
On Tuesday morning, the stock markets awoke to the news that a ship had crashed into the Francis Scott Key Bridge in Maryland. The accident destroyed the bridge, killed six, and left the Port of Baltimore inoperable. As a result, shares of CONSOL Energy (CEIX), declined sharply in price, since that port plays a significant role in the coal producer’s international distribution. At the same time, stocks of several auto manufacturers’ also pulled back in value, as the Port of Baltimore usually handles the shipment of around 850,000 cars annually. Additionally, cruise liners also leave the port with around 440,000 travelers each year. The Baltimore port will be closed for an indeterminate amount of time, causing supply chain disruptions across several industries, and this outcome could increase some inflationary pressures over the short term.
The major indices trended sideways through most of the day Monday before heading lower in the final leg of trading. Overall, the S&P 500 fell 15 points (down 0.28%), the NASDAQ finished 69 points lower (down 0.42%), and the Dow Jones Industrial Average declined 31 points (down 0.08%). Market breadth was slightly negative, as decliners outpaced advancers by a 1.2-to-1.0 ratio. Healthcare stocks were among the best performers of the day, aided by United Health (UNH), while utility stocks were among the sharpest decliners.
In commodity news, oil prices declined yesterday as prices were hurt by climbing inventories in the United States. Oil prices had gained ground in recent days following an attack on oil refineries in Russia that caused around 900,000 barrels of refining capacity to be taken out of global markets. Elsewhere, U.S. Treasury bond yields were little changed yesterday. The Chicago Board Options Exchange Volatility Index, or VIX, commonly known as the fear index, rose rapidly in the final portion of the trading session, suggesting traders bought protection against a further decline in stock prices.
Several economic reports will be released in the days ahead. These include initial jobless claims, the second revision for U.S. GDP for the fourth quarter of 2023, and pending home sales for February on Thursday. On Friday, the core and noncore Personal Consumption Expenditures (PCE) index for February and personal income and spending will be released, giving further insight into inflationary data and how the consumer is faring. Elsewhere, several dozen companies will report fiscal quarter results in the days ahead, including former Dow-30 component Walgreens Boots Alliance (WBA). - John E. Seibert III
At the time of this article’s writing, the author held positions in one or more of the companies mentioned.
CLICK HERE for more information on our services or call 1-800-VALUELINE (1-800-825-8354). Our account managers are available Monday through Friday, 8:00 AM to 6:00 PM Eastern Time.
