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US Stock Market Overview – Stocks Slide on Coronavirus Fears

US stocks traded under pressure on Friday as the dollar finally reversed which could provide a respite for large-cap multinational companies. The strength of the greenback is putting downward pressure on EM and Asian shares, which eventually could spill over on US stocks. The S&P 500 index could be vulnerable to profit-taking. Multinational corporations will suffer earnings losses as the dollar moves higher which means that the earnings forecasts in the US might be overstating the value of US stocks.

Multinational corporations that have earnings in other currencies, will only be able to capitalize on the value of the earnings if they are hedged. If not, when they convert the foreign currency back to US dollars, they will get less than they would last quarter. Gold prices surged higher buoying mining companies.

Sectors in the S&P 500 index were mixed, with technology leading the broader markets lower.  Real-estate bucked the trend.

Existing Home Sales Fall in January

US existing home sales fell in January. The National Association of Realtors said on Friday existing home sales declined 1.3% to an annual rate of 5.46 million units last month. December’s sales pace was revised down to 5.53 million units from the previously reported 5.54 million units. Expectations were for existing home sales falling 1.8% to a rate of 5.43 million units in January. Existing home sales, which make up about 90% of U.S. home sales, surged 9.6% on a year-on-year basis in January.

Jobless Claims Bounce as Expected

Initial claims increased 4,000 to 210,000 for the week ended February 15, according to the Labor Department. The expectation had forecast claims to increase to 210,000 in the latest week. The four-week moving average of initial claims, fell 3,250 to 209,000 last week.

Regional Manufacturing Rises More than Expected

The Philadelphia Fed gauge of business activity surged in February to its highest level in three years. The regional Fed bank’s index jumped to 36.7 in February from 17 in the prior month. Expectations had been for the index to come in lower at a 10 reading.

This article was originally posted on FX Empire

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