February 6, 2018 Market Outlook

Dow Jones Posts Worst Closing Point Decline Record

Wall Street is worried before Tuesday’s opening bell after the Dow Jones went into free fall on Monday. The bluechip index plunged almost 1,600 points which is the biggest point decline in history during a trading day. Buyers tried to contain the damage but failed. At the closing bell, the Dow was down by 1,175 points. That is by far its worst closing point decline on record.

World Stocks Reeling from Massive Sell-Offs

Only eight days ago, global stocks have been hitting record high values. On Tuesday, the collective losses of world stock markets reached $4 trillion after four straight days of decline. Investors in Europe and Asia’s main bourses are left with no option but to go to the traditional and safer investments like  gold, the Japanese yen, and government bonds.

Wall Street futures offer little promise as they turned higher but prices of commodities like oil and metals are tumbling as well. It watered down their best starts to a year. Analysts believe the stock sell-off that snowballed globally is a sign of healthy correction. Others contend that volatility is slowly creeping in. 

Fund Managers Sees Buying Opportunities for Bonds

One of the world’s largest bond fund managers, Pimco, together with international adviser Guggenheim Partners say the benchmark 10-year Treasuries yielding 3% are attractive investment outlets. The bond market has just entered a bear phase and has turned into one of the best buying opportunities in years.

According to Dan Ivascyn, group chief investment officer of Pimco, valuations are beginning to look more interesting. While he sees further weakness in rates during the first half of the year, the upside from yields is still limited.

Bitcoin Suffers Huge Losses as Price Drops Further

The price of the world’s best-known cryptocurrency Bitcoin slid another 13% on Tuesday, dropping below $6,000. Bitcoin losses are estimated to be more than half since the start of 2018.

Persistent news about regulatory clampdown on the nascent market and spooked investors are pushing prices lower. Bitcoin reached a peak of almost $20,000 in December. On the Luxembourg-based bitstamp exchange, bitcoin went down as far as $5,920, its lowest level since mid-November. Other cryptocurrencies were not exempt as majority also suffered sharp declines this week.

Disney Expects Boost from 21st Century Fox’s Star Wars

Disney (DIS) is one of five corporate names presenting its earnings report on Tuesday. The company is optimistic that their disclosed plan to buy a major chunk of 21st Century Fox will get a boost from “Star Wars: The Last Jedi.” The movie raked in a whopping $1 billion plus globally. 21st Century Fox (FOXA) is on tap to report on Wednesday.

Reporting with Disney today are Chipotle (CMG), General Motors (GM), Snap (SNAP) and Dunkin’ Brands (DNKN).

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