Stocks and yields crack lower

Technical Analysis

Author: Greg Michalowski | nasdaq

Concerns about growth?

We have played the story before, but the stocks have tilted to the downside of late. Yields also move lower.  Are the warnings about growth starting to weigh on the market?

The prior times that we've seen weakness in stocks, buyers have come in pushed the indices back higher. Yesterday the NASDAQ and S&P indices both closed at record all time high levels.

The current indices are showing:
  • S&P index -19 points or -0.56% 3366.70
  • NASDAQ index -87 points or -0.89% 9730.6
  • Dow -187 points or -0.64% at 269160
In the US debt market the 10 year yield is down 4.9 basis points at 1.517%.

Concerns about growth? The yield curve continues to flatten with the 2-10 year spread at 12.57 basis points versus 14.42 basis points at the close yesterday. 

Looking at the chart of 10 year yields, the 1.501% to 1.5034% was the low yields for the year and going back to October. The low yield for 2019 was at 1.4272% back in early September. With the current yield at 1.517%, the yield is not far from the October/February 2020 lows.  

US 10 year yields are testing key support at the 1.501% area
Gold is currently trading up about $10 or 0.62% at $1621.73. The high price reached $1622.53
WTI crude oil futures have come off their high levels and currently trades at $54.13. That is up $0.84 or 1.58%. The high price reached $54.50 while the low extended to $53.22.

The USDJPY has tilted a bit to the downside (although still up about 55 pips on the day. Looking at the 5 minutes chart, the price just dipped below its 100 bar moving average at 111.97 (the price is also back below 112.00).  The rising 200 bar moving averages at 111.67 currently (green line in the chart below).

USDJPY moves lower
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