After an ugly, coronavirus-induced market sell-off last week, investors got a nice bounce Monday, as the market looks for the Federal Reserve to ease financial conditions in the wake of a potentially negative impact from a coronavirus pandemic.
After having corrected to the tune of more than 14%, the S&P 500 rose 4.6% Monday, with the Dow Jones Industrial Average rising 1,293 points, or 5.09% and the Nasdaq rising 4.49%. The S&P 500 is still roughly 9% off of its all-time high, although it’s now out of correction territory.
This wasn’t a classically risk-on day, as the 10-year treasury yield slipped a bit to 1.153%.
Investors are looking for the Fed to cut rates, to stave off recession induced by the virus, which some don’t even expect to shave off more than a few basis points from U.S. GDP in 2020. Many also see the second half of the year resembling the first month of the year, from a GDP growth standpoint. Investors see a 100% chance of a rate cut in March, according to data from CME Group.
Retail earnings, which should provide color on supply chain troubles from the coronavirus, ongoing checks on manufacturing in China, the EU and the U.S. and broader GDP growth will be in focus for the near future.