As of 2 p.m. New York Time today, March 1, the Standard & Poor’s 500 was up 2.57% and the Dow Jones Industrial Average was higher by 2.30%. The NASDAQ Composite had climbed 2.80% and the NASDAQ 100 had gained 2.83%.
The small cap Russell 2000 had added 3.30% and the iShares 2000 MSCI Emerging Markets ETF (EEM) was up 2.90%.
Yep, it didn’t take much of an improvement in the Treasury market to send investors and traders screaming back into stocks.
As of 2 p.m. the yield on the 10-year Treasury was up 4 basis points to 1.45%. But the shorter end of the yield curve, which had pitched a fit last week that included a failed auction for the 7-year note on Thursday, prices had climbed slightly and yields were down slightly at 0.72% for the 5-year not and 0.13% for the 2-year Treasury.
On Friday the yield on the 5-year note had climbed 16 basis points to 0.73%. At today, low in yield and top in prices, the yield on the 5-year note had dropped to 0.68%.
With bonds stabilizing, traders and investors decided it was a good day for moving back–strongly–into risk in the stock market. Such risk on favorites as CRISPR Therapeutics (CSSP) and C3.AI (AI) were up, at 2 p.m., by 5.07% and 6.80%, respectively. Tell (TSLA) ws p 5.06% and PayPal (PYL) had gained 5.00%.
But today isn’t a complete rotation out of “vaccine recovery” stocks and back into technology momentum favorites. Chemical makers Dow (DOW) and Dupont (DD) had moved higher by 4.33% and 4.75%, respectively. Utility stocks NextEra Energy (NEE) and AES (AES) had gained 4.42% and 2.22%, respectively. Ad agency Omnicom (OMC) was higher by 3.75% and Coca Cola (KO) had gained 2.84%.
The optimism in the bond market will be tested later this week by reports on the manufacturing sector, housing and the February employment rate. Overly (whatever that means these days) positive news could well send the bond market back to worrying about inflation from the $1.9 trillion coronavirus package and other stimulus efforts.
If you’ve been thinking of selling in order to cut risk and protect profits in your portfolio, this bounce(?)/rally(?) is an attractive opportunity. This morning I posted sells for Ilumina (ILMN), VMware (VMW), Corteva (CTVA) and West Pharmaceutical (WST) out of my online portfolios from my Special Report: “Profit and Protect” on my subscription JubakAm.com site.