- Stocks closed a high note amid issues raised on the slowing economy
- Banking sector shares trade on a high as well
- Housing stocks fall but widely miss expectation
General sentiments on Wall Street were dampened by lingering reverence that the economy is going on a slow pace despite stock closing on a high note on Tuesday.
The Dow closed 140 points higher after going up by as much as 279 points. The S&P 500 closed 0.7 percent higher after rising 1.1 percent in its dealings. The Nasdaq also made gains of 0.7 percent.
Stocks Close High
Shares in the banking sector outdid each other with SPDR S&P Bank ETF (KBE) making profits of 2 percent. Bank of America, Morgan Stanley, Goldman Sachs, J.P Morgan Chase and Citigroup all went up by more than one percent each.
The big median peeled their gains against the benchmark 10-year treasury yield.
The 2.42 percent averaged by the benchmark in the afternoon trading, with a 3 basis points short of its mark. The shift comes after it recorded its lowest yields since December 2017. The 10-year’s decline caused a so-called yield-curve inversion as the 3-month Treasury bill yield moved above the benchmark rate. Investors see a yield-curve inversion as a signal that a recession may be on the horizon, so a rise in long-term rates is being viewed as a positive right now.
This inverted yield curve comes after the release of downgraded economic data from the U.S. and globally in addition to weak U.S. economic outlook from the Federal Reserve.
“There’s lots of angst about global economic growth. That’s understandable because it has been slowing significantly since early 2018,” Ed Yardeni, the president and chief investment strategist at Yardeni Research, wrote in a note. “Furthermore, we can all observe that ultra-easy monetary and debt-financed fiscal policies aren’t as stimulative as policymakers have been hoping.”
Trump on The Clear
Statistics pertaining to housing went down by 8.7 percent in February, missing expectations by a wide margin. The building permit decelerated but at a much slower rate than overseen by the economists. Consumer certainty wet down in March to 124.1 from 131.4 in February, this is according to findings by the Conference board.
With news emerging that President Donald Trump did not collude with the Russians in the 2016 presidential race according to evidence gathered Special Counsel Robert Mueller, the markets were bolstered by eliminating any future uncertainties. Investors also had their hopes high that with the investigation out of the way, Trump will now turn his attention to propagating for trade deals.
However, fears pertaining to the global economy belittled market gains in the wider market.
“Expectations are for a pretty weak first quarter overseas to go along with a fairly weak U.S.,” said Sam Stovall, chief investment strategist at CFRA Research. “The real question is whether it’s just a weak first quarter and then it recovers. Our expectation right now is that it is more of a soft landing.”