Today’s Stock Market News { 1 February, 2020 }

Today’s Stock Market News — U.S. equity markets wiped out their gains for the year on Friday, following European and Asian shares lower as concern escalated about the impact of the coronavirus on global growth.

The death toll from the epidemic had risen to 213, Beijing said, with another 9,811 confirmed cases worldwide and a further 15,000 suspected. The US announced restrictions on entry to the country for foreigners who have recently travelled to China, and airlines cancelled flights to China.

The US equity benchmark, the S&P 500 index, closed down 1.8 per cent and the Dow Jones Industrial Average fell more than 2 per cent. Both registered their biggest weekly percentage declines since August.

Weighing on European stocks alongside coronavirus fears was economic data that showed the eurozone’s fourth-quarter growth in 2019 was only 0.1 per cent, below expectations of 0.2 per cent.

Caterpillar, the world’s biggest construction and mining equipment maker, cast a further shadow, after it reported lower sales for the past quarter and forecast worse than expected earnings for this year. Strong earnings from Amazon limited the decline of the tech-weighted Nasdaq Composite index to 1.69 per cent.

The coronavirus outbreak will reduce US economic growth by 0.4 percentage points in the first quarter in the face of declining numbers of tourists from China and exports to Asia, according to Goldman Sachs economists.

“The market reaction may deepen further if the virus spreads further,” said Kristina Hooper, chief global market strategist for Invesco. “The most recent revelation of new infections in China and elsewhere suggests that the market will be faced with further downside risks.”

With Friday’s drop, the S&P 500 wiped out its gains for 2020, having been up 3.1 per cent at its highest close earlier this month. The benchmark index is now down 0.2 per cent year-to-date, while the Dow is down 1 per cent and the Nasdaq Composite’s 2020 gain has been trimmed to 2 per cent.

Bourses in Paris and Frankfurt earlier closed down more than 1 per cent, while the Stoxx Europe 600 was 1.1 per cent lower, leaving the continent-wide benchmark down 3 per cent for the week.

Eurostat data revealed the eurozone ended last year with a whimper, as the French and Italian economies both shrank unexpectedly, denting hopes that the region was poised to rebound from its recent sluggish performance.

Government bonds in the eurozone extended their gains this week following the disappointing growth data, pushing yields to fresh lows for the year. The yields on the 10-year German Bunds and UK gilts were down 2 basis point to minus 0.42 per cent and 0.53 per cent, respectively.

US Treasury yields also sank. The yield on the benchmark 10-year Treasury note fell to 1.50 per cent, the lowest since October. The 30-year Treasury bond yield fell below 2 per cent, the lowest since September.

Bonds had already rallied significantly in recent days as fear over the spread of coronavirus fuelled demand for haven assets.

Traders were pricing in at least one rate cut by the Federal Reserve in July, with indications of another rate cut increasing for later this year.

“The market impact of the coronavirus outbreak in China . . . increasingly resembles last year’s trade-war-driven turmoil in May and August,” said Jonas Goltermann at Capital Economics. “But unless the fallout from the epidemic escalates significantly, it is hard to see the sharp falls in bond yields persisting.”

Worries surrounding the coronavirus have consequently hit Asian markets. Hong Kong’s Hang Seng closed down 0.5 per cent on Friday while South Korea’s Kospi ended its session 1.3 per cent lower.




Traders Pay Up For Protection Against Sharp Falls In US Stocks

Stock Market News Today— Traders have been scrambling to protect themselves from a collapse in US stocks, spooked by the coronavirus outbreak, the looming presidential race and the sheer strength of last year’s rally.

The US equity market climbed 29 per cent in 2019 and started this year strongly, but the spreading nervousness has sent the S&P 500 index down by about 2.5 per cent since the middle of the month.

The Cboe Volatility index — known as the market’s “fear gauge” — suggests that traders are now bracing for sharper moves. The 10-day moving average volume of Vix call options — derivatives that allow traders to benefit from a spike in turbulence — has increased from 200,000 traded at the start of January to about 400,000.

The Vix itself has climbed from a low of about 12 points in mid-January to over 18 on Thursday, when the S&P 500 index was off by 0.7 per cent by midday in New York.

There are many negative factors “that are screaming for a big stock sell-off”, said Stephen Aniston, president of vixcontango.com, a volatility trading analytics provider.

Activity in put options linked to the US stock market, which offer investors protection against equities slumping, has also been rising in recent weeks as the spreading coronavirus and the approaching US presidential election has investors on edge.

Trading in S&P 500 put options has climbed to levels not seen since September. The 10-day moving average for put volume on the S&P 500 has gone from 720,000 at the start of January to 920,000, again the highest since October.

Traders said the flurry of hedging activity is similar to October 2018, when Federal Reserve chair Jay Powell’s remarks on interest rate increases and “quantitative tightening” rattled the market, and also in February 2018, when Vix-linked funds hit trouble.

A slide in government bond yields and a rise in gold prices are further signs of investors’ sharpened appetite for safe assets, traders noted. The benchmark 10-year US Treasury yield sank to a four-month low below 1.55 per cent on Thursday, while gold has nudged above $1,580 a troy ounce.

The upcoming US presidential election has also prompted some investors to buy insurance against market declines. Senator Bernie Sanders recently surpassed former US vice-president Joe Biden in a poll on the popular political betting site PredictIt for the first time, just days ahead of the first caucus for the 2020 Democratic presidential nomination.

A Deutsche Bank poll indicated that 90 per cent of clients thought that a victory for Mr Sanders would be negative for the US stock market. The left-leaning US senator from Vermont is in the lead with a 39 per cent chance of winning the Democratic nomination, according to bets on PredictIt. Data gathered by Real Clear Politics has him ahead in Iowa, which casts the first votes of the 2020 campaign next week.

“The market is going to start to price in some serious probability of a leftwing Democratic win, which will hit stocks quite a bit,” Mr Aniston said.

Investors are also worried that underwhelming corporate profits will unsettle the stock market, given how far and fast it rallied over the past year. “We now see the market fully valued, particularly within US equities. This is not going to persist indefinitely,” warned Erin Browne, a managing director at Pimco.




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Best Stock Trading Platform In Europe {2020}



StockMarketNews.Today — what is the best stock trading platform in Europe for 2020? ….  How To Choose The Best Online Broker in Europe { 2020 } …


Best Online Trading Platform. Start Trading Now or Try a FREE Demo Account.


To evaluate brokers, you should look at the following factors:

>>> Commissions
>>> Account Minimum
>>> Account Fees
>>> Your Trading Style and Tech Needs
>>> Promotions

Look at commissions on the investments you’ll use most… Brokers generally offer a similar menu of investment options: individual stocks, options, mutual funds, exchange-traded funds, and bonds. Some will also offer access to futures trading and forex (currency) trading.


A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today


The investments offered by the broker will dictate two things: whether your investment needs will be satisfied, and how much you’ll pay in commissions. Pay careful attention to the commissions associated with your preferred investments:

Individual stocks: You’ll typically pay a per-trade commission of $4 to $7. Some brokerages also offer per-share pricing.

Options: Options trades often incur the stock trade commission plus a per-contract fee, which usually runs $0.15 to $1.50. Some brokers charge only a commission or only a contract fee.

Mutual funds: Some brokers charge a fee to purchase mutual funds. You can limit mutual fund transaction costs or avoid them completely by selecting a broker that offers no-transaction-fee mutual funds. (Mutual funds also carry internal fees called expense ratios. These are charged not by the broker, but by the fund itself.)

ETFs: ETFs trade like a stock and are purchased for a share price, so they are often subject to the broker’s stock trade commission. But many brokers also offer a list of commission-free ETFs. If you plan to invest in ETFs, you should look for one of these brokers.

Bonds: You can purchase bond mutual funds and ETFs at no charge by using no-transaction-fee mutual funds and commission-free ETFs. Brokers may charge a fee to purchase individual bonds, with a minimum and maximum charge.

Pay attention to account minimums… You can find highly ranked brokers with no account minimum. But some brokers do require a minimum initial investment, and it can skew toward $500 or more. Many mutual funds also require similar minimum investments, which means even if you’re able to open a brokerage account with a small amount of money, it could be a struggle to actually invest it.

Watch out for account fees… You may not be able to avoid account fees completely, but you can certainly minimize them. Most brokers will charge a fee for transferring out funds or closing your account. If you’re transferring to another broker, that new company may offer to reimburse your transfer fees, at least up to a limit.

Most other fees can be sidestepped by simply choosing a broker that doesn’t charge them, or by opting out of services that cost extra. Common fees to watch out for include annual fees, inactivity fees, trading platform subscriptions and extra charges for research or data.

Consider your trading style and tech needs… If you’re a beginner investor, you probably won’t need extras, like an advanced trading platform. But you may want an education and a little hand-holding. This could include videos and tutorials on the broker’s website, or in-person seminars at branches. Many brokers offer these services free to account holders.

Active traders, on the other hand, will want to look for a brokerage that supports that kind of frequency. That includes weighing a broker’s trading platforms, analysis tools, research and data offerings in addition to commissions — including discounts for high-volume traders — and fees.

Plenty of high-quality online brokers offer free demo access to trading platforms.

Take advantage of promotions… Online brokers, like many companies, frequently entice new customers with deals, offering a number of commission-free trades or a cash bonus on certain deposit amounts.

It isn’t wise to choose a broker solely on its promotional offer — a high commission over the long term could easily wipe out any initial bonus or savings — but if you’re stuck between two options, a promotion may sway you one way or the other.


Best Online Trading Platform. Start Trading Now or Try a FREE Demo Account.


 

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