Interest Rates Telegraphing Possible Recession

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as interest rates telegraphing possible recession. Stocks in heat map are based on the top 10 holdings of each sector ETF. Click on each picture to zoom in. Below is a summary of today’s action on Wall Street provided by CNBC:

Dow futures slightly higher, but recession fears cap gains

U.S. stock index futures were slightly higher Wednesday morning, as market participants continued to try to come to terms with a sharp shift in bond markets. At around 3:30 a.m. ET, Dow Jones Industrial Average futures rose 39 points, indicating a positive open of more than 38 points.

The S&P 500 (SPY) fell -0.46% today. Sector decliners led advancers 10 to 1 as shown below in the sector graph. Communication services (XLC), consumer discretionary (XLY), consumer staples (XLP), energy (XLE), financials (XLF), real estate (XLRE), healthcare (XLV), materials (XLB), real estate (XLRE), technology (XLK) and utilities (XLU) each had minor losses of less than 1%. Industrials (XLI) squeezed out a small gain of less than 1%.

The Dow Jones index dropped 32 points (-0.13%) to close at 25,625. The Nasdaq gave back 48 points (-0.63%) to settle at 7,643.

Interest Rates Telegraphing Possible Recession

Stocks lost ground on Wednesday after interest rates dropped the most in over a year. The 10 year treasury bond interest rate fell to 2.386%, its lowest rate since 2017. The 3 month bond rate is higher than the 10 year rate, inverting the yield curve, seen as an early indicator for a possible recession. The US treasury yield curve has inverted before each recession in the past 50 years with just one false signal in that 50 years.

Key Takeaways…

I took the following CNBC screenshots this morning regarding banks get beat up, fintech on fire and bond ETFs:

Interest Rates Telegraphing Possible Recession

Interest Rates Telegraphing Possible Recession

Interest Rates Telegraphing Possible Recession

Notable S&P 500 Movers…

Below I’ve highlighted some notable S&P movers (both winners & losers).

Credit: Sector Graph provided by Sector SPDR app. Sector breakdown provided by Charles Schwab. Sector heat map provided by finviz. Information Credit: News Headlines and quotes were taken from CNBC in the writing of this post.

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3/27/19

S&P 500 Sector Graph

Interest Rates Telegraphing Possible Recession

S&P 500 (SPY)

Interest Rates Telegraphing Possible Recession

Communication Services (XLC)

Interest Rates Telegraphing Possible Recession

Consumer Discretionary (XLY)

Interest Rates Telegraphing Possible Recession

Consumer Staples (XLP)

Interest Rates Telegraphing Possible Recession

Energy (XLE)

Interest Rates Telegraphing Possible Recession

Financials (XLF)

Interest Rates Telegraphing Possible Recession

Real Estate (XLRE)

Interest Rates Telegraphing Possible Recession

Healthcare (XLV)

Interest Rates Telegraphing Possible Recession

Industrials (XLI)

Interest Rates Telegraphing Possible Recession

Materials (XLB)

Interest Rates Telegraphing Possible Recession

Technology (XLK)

Interest Rates Telegraphing Possible Recession

Utilities (XLU)

Interest Rates Telegraphing Possible Recession

S&P 500 Sector Heat Map

Interest Rates Telegraphing Possible Recession

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