Hey Scoopers,
Stock market optimism didn’t last too long, and all three indices returned to the red zone despite the Fed’s emergency interest rate cut – more on that in the “Overall Market” section.
Beyond the overall market, home builders are the unexpected winners of the coronavirus epidemic while credit card processors are the losers — more on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, have you heard of pantry panic buying? It’s the contribution of coronavirus to the everyday lingo — more on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:
Market Recap
- U.S. markets: After only one day of recovery, stock market indices return to the business of falling. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price is now hovering in the $8,000 range.
Brand New: 8 Minute Options Trading Cookbook
Have you downloaded our free “8 Minute Options Trading Cookbook” that shows you how to generate income in just 8 minutes per day?
You’ll get our very favorite options strategy that will allow you to succeed on every trade in 5 different ways.
…it takes just seconds to download it right here.
The Fed Didn’t Save Us, Although It Tried.
Poor Federal Reserve … nothing makes the stock market happy… not even a 0.5% interest rate cut…
On Friday afternoon, the Federal Reserve made the announcement that it is ready to take all necessary measures to protect the economy from the impact of coronavirus. On Tuesday, it did precisely that. The market was up on Monday in celebration of the news, however, by the time the actual cut was announced, the optimism was already gone and the stock market went back to its panic mode.
In all fairness, the coronavirus impact on the economy is on the production side. The interest rate cut, typically, solves the issues related to the lack of demand in the economy. Moreover, commonly, an emergency rate cut is perceived as the stamp of approval that the economy is in danger. Nevertheless, the Fed wasn’t able to save the market with a cut immediately, even though it tried.
Homebuilders Won.
So, what happened?
Shares of homebuilder stocks were up in response to a lower interest rate. Lower interest rate means lower mortgage rate for new and refinances rates, and that means more business for homebuilders. Lennar (Ticker: LEN), PulteGroup (Ticker: PHM), D.R. Horton (Ticker: DHI) were among the homebuilder stocks that are the indirect winners of the coronavirus epidemic.
