The Stock Market At Close – Monday, March 20
The Toronto Market
The TSX index was up triple digits today. The index gained 131.71 points, or 0.7%, to close the market session at 19,519.43.
The market performance was largely the result of the successful frantic effort of the Swiss government to engineer the purchase of Credit Suisse by rival UBS. It to some extent, brings to mind the purchase of troubled Countrywide Financial in late 2008 by Bank of America.
The financial sector within the TSX, which accounts for nearly 30% of the TSX’s weighting, added 0.5% on Monday, while the energy sector was up 2.9% as oil rebounded from a 15-month low. U.S. crude oil futures settled 1.4% higher at $67.64 a barrel.
Analyst today said that Canada’s top six lenders have ample liquidity and manageable credit risks which will help them to emerge largely unscathed from the crisis of confidence that has rocked global banks over the last two weeks.
The Royal Bank of Canada (RY) today gained 1.01% or $1.29 to close at $128.55 with a volume of 2.2M shares traded. The Royal Bank was the best performing Canadian big bank stock at today’s market session.
The US Market
The main story driving the US markets today was the purchase of Credit Suisse by UBS which is a competitor all in an effort to calm the markets stave off further bank runs. UBS late on Sunday agreed to buy rival Credit Suisse for $3.23 billion, in a merger engineered by Swiss authorities to avoid more turmoil in the banking group.
The move appeared to be a success as most of the bank stocks gained today although a few still declined. The Dow Jones gained during today’s market session. All of the major S&P 500 sectors ended higher.
The Dow Jones index gained 382.6 points, or 1.2%, to close at 32,244.58. The S&P 500 gained 34.93 points, or 0.89%, to close at 3,951.57. The NASDAQ index gained 45.03 points, or 0.39%, to close the market session at 11,675.54.
The regional bank, First Republic Bank fell 47.1% following a downgrade by S&P Global and a report of more fundraising that fueled fears about the bank’s liquidity despite a $30 billion rescue last week. Trading in shares of the bank was halted several times due to volatility. However, another regional bank, PacWest Bancorp closed up 10.8% after the bank said deposit outflows had stabilized.
Investors’ focus is now shifting to the big event of the week – the two day meting of the Federal Reserve Board. The meeting starts tomorrow and ends Wednesday. The announcement on any interest rate decisions made are usually made at 2pm on that day. That announcement is typically a market moving event.
Today, the S&P 500 posted 1 new 52-week high and 8 new lows; the Nasdaq Composite recorded 33 new highs and 298 new lows. Indications are that the current market needs some tome to work through the correction. The volume, as shown in the image below, clearly supports the reading that most investors remain on the sidelines. Volume on the NASDQ was down 48%.
10 –year Treasury Yield: The US 10-year yield rose to 3.47%, while the two-year rate advanced to nearly 3.92% intraday.
Stocks In The News/ Stocks To Watch
Amazon.com (AMZN) fell more than 2% after Chief Executive Andy Jassy said in an internal message that the e-commerce giant plans to lay off another 9,000 people. The move will affect Amazon Web Services, human resources, advertising, and the Twitch livestreaming service groups, according to the message.
PDD Holdings (PDD) stock fell nearly 13% after the company’s Q4 results fell short of analysts’ estimates as costs increased and merchandise sales slid year on year. The Chinese e-commerce platform reported Q4 adjusted earnings of 8.34 yuan ($1.21) per American depositary share and revenue of 39.82 billion yuan.
Technoglass Inc. gained 4% or $1.48 to close at $38.44 with a volume of 254.2K shares traded. Enphase gained 4.83% or $8.87 to close at $192.51 with a volume of 5.1M shares traded. Microsoft Corp (MSFT) slid today.
Thomson Reuters stock continues to weather the banking storm well. Etsy Inc. (ETSY) may be in the early stages of a new upward swing, if the market stabilizes a bit more.
News reports showed on March 15th, as per to HKEX Filing, that JPMorgan’s Long Position in Hong Kong shares of Bilibili fell to 8.89% – from 9.48% .
Regular Market Day Features
Beginner Investor’s (Canadian stocks) Watchlist
The Canadian banks bounced back somewhat today. Bombardier continues to decline.
The Canadian Vanguard Chinese Stocks Watchlist
Baidu (BIDU) continues to gain and looks promising. Pinduoduo (PDD) may eventually bounce back but when a stock crashes 13%, it cannot be good for the portfolio. The stock may bounce back slightly immediately but it could continue to crash further. It is always risky to carry the full portfolio into an earnings announcement especially in a market in correction.
EV, Energy and Resource Stocks Watchlist at Today’s Market
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