Wednesday’s sell-off gave back Tuesday’s gains which, in turn, erased Monday’s decline. That sums up the current market uncertainty as investors wade into earnings season, a parade of dividend suspensions and downbeat fiscal outlooks. Specifically, the S&P shed 2.2% and the TSX slipped 2.1% on Wednesday, though the Nasdaq lost only 1.44%. The VIX spiked 8%, but remains less than half the level on March 18, when investors stampeded to the exits.
In Toronto, energy led the sell-off, but financials also took a hit of -3.37%. Some gold stocks like Roxgold (up 12.63%) continued to attract safe-haven money, but so did Alimentation Couche-Tard, with its empire of global gas stations, which rallied 4.51%. In New York, Netflix continued to march higher, up 3.19%, and Unitedhealth Group rallied 4.13%.
There’s been a gradual market shift from focusing on COVID-19 data to macroeconomic data. The bad news is that a barrel of WTI closed below $20 for the first time since February 2002. (WCS managed to leap above $7.) Despite Trump’s intervention and OPEC’s record cutback, oil continues to languish, largely because hardly anyone is driving. Oil is seeing its lowest demand in 25 years. Meanwhile, shrinking American retail sales and industrial production in March is weighing on investors, though the declines shouldn’t surprise anyone. The good news is that the number of new COVID-19 cases continues to decline, even sharply, in hot spots, the U.S., Italy, Spain and France. Governments continue to discuss opening up their societies and economies.