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Bank stocks are trading slightly higher as Treasury yields climb from the low levels seen in the previous session. Bank of America and JPMorgan Chase are up 0.2% and 0.4%, respectively, in the premarket. Citigroup and Morgan Stanley are gaining 0.3%. The 10-year Treasury yield is trading at 1.364% after falling to a record low on Tuesday. Lower yields put pressure on banks’ profit margins. âImbert
One of the few beneficiaries of the two-day selloff: huge trading volume. CME (futures) reported record volumes yesterday. CBOE (options, VIX) saw the heaviest day of trading in VIX futures since October 2018, according to Piper Sandler. NYSE volume was 50% higher than normal. Watch market maker Virtu, up 11% this month, which benefits during periods of high trading and volatility. âPisani
The 10-year Treasury yield climbed on Wednesday, after sinking to an all-time low as investors sought the safety of U.S. government debt amid heightened fears about the fast-spreading coronavirus. The benchmark yield, which moves inversely to price, rose three basis points to 1.359%. The 2-year yield, however, hit a low of 1.157% on Wednesday, its lowest level since Feburary 2017. The short-duration rate is the most sensitive to Federal Reserve’s monetary policy expectations. Traders have increasingly priced in a rate reduction at the central bank’s April meeting. âLi
UBS notes that the 7% decline in the S&P 500 in three days is the 25th worst since 1950. Strategist Keith Parker believes that stocks are likely to remain volatile over the coming weeks as coronavirus cases outside of China increase, companies lower earnings forecasts and U.S. election primaries cause uncertainty. “Valuation is supportive and growth in Q2 is expected to rebound, but risks remain,” the strategist wrote in a note. Parker is advising clients to buy quality and momentum stocks, which tend to outperform in the two months following volatility shocks. âMelloy