Market Commentary & Analysis February 8, 2020

The equity market rallied to fresh new heights last week, as traders and investors looked preceding coronavirus attention and got support from positive economic fundamental data.

The tech-heavy Nasdaq Composite index bettered other indices with a +4.0% weekly increase, followed by the broad S&P 500 index with +3.2%, DJI Average index with +3.0%, and small-cap Russell 2000 index print of +2.7%.

The predominant belief was that the global economy is fine and dandy, and an adversarial impact emerging from the coronavirus will be minimum, based on economic steps piloted by China. To least, we can say, BTFD (Buy The F*cking Dip) trade was supported by various positive developments such as upbeat America's economic data.

Ten of the eleven S&P 500 index sectors contributed to the market boost, notably the information technology sector posting +4.5% and the materials sector with +4.2% gains. The utility sector posted a negative 0.6% and was the lonesome loser.

China strengthened market faith after it infused liquidity into its stock markets to support any hysteria from the coronavirus and stated it would cut on Feb. 14 $75 billion worth of tariffs on United States imports as much as 50%. 

Furthermore, reports showed that the PBoC (People's Bank of China) is preparing additional incentives that will stimulate business lending activity.

The coronavirus is not in the rearview mirror - yet, as several companies like Nike and Walt Disney announced it would have an adverse consequence on its financial returns. However, the market is very hopeful that it will not get more serious. Apple inc. For its part briefly closed its stores in China, yet company shares climbed more than 3% this week.

Tesla Inc. stock was obviously the story of the week as their share price soared nearly 49% in a spread of fewer than two days sessions in a short squeeze. However, Tesla shares ended higher, advancing 15.0% for the week.

Separately, Google parent company Alphabet inc. Published revenue that was inferior to Wall Street expectations; however, the stock contained the initial instability.

Other market(s)

The United States Treasuries ended the week lower, pushing yields higher across the primary rate curve. The Two-year yield extended seven basis points to close at 1.39%, and the ten-year yield rose six basis points to settle at 1.58%. 

The United States Dollar Index (DXY) surged 1.3% to 98.70. The West Texas Intermediate (WTI) crude oil fell $1.23 or 2.4% to finish the week at $50.35/bbl, however, being powerless to attract activity from talk of probable OPEC plus crude production cuts.

In a very suppressed trading week, Gold and Silver settled in the consolidation zone this week. In Friday session, Gold had drifted $3.54 or 0.23% upward to close $1,570, and Silver advanced by over 12 cents to finish at $17.69.

Cryptocurrency market

The crypto market segment had a moderately neutral session on Friday following a string of bullish trading sessions, with the majority the prime crypto coins being small changed.

We have been observing symptoms of weakness amid the smaller tokens. At the same time, the most significant coins failed to cross over the key resistance levels that we have been watching in recent trading sessions, therefore even though the uptrend continues to be decidedly intact, we might be positioned in for another retracement.

Technical Analysis and Outlook: Bitcoin continuously to trade slightly above the obsolete Key Res $9,540 level, with very low volatility and moderate trading action. The leading coin in high probabilities will attack the all-important $10,000 Maginot line, in its Sub-Trend advancement, and with the long-term Main Trend outlook path.

Gold Market

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