Recapping a Record-Breaking Day Yesterday

Yesterday was an incredible day. Here we present some of the statistical highlights. Crude oil gained over 10% for its largest one-day move since March 2015. It was also the second-largest gain since 2009. Think about this, crude oil has moved 5% (up or down) 7 of the past 10 days. The last time (and only time since 1983) that happened was October 2008.

The U.S. dollar dropped 1.6%, for its largest drop since December 3, 2015, the day the European Central Bank (ECB) extended its quantitative easing (QE) program.

The Dow was down more than 1% and closed up more than 1% for the first time since October 2, 2015. The time before that was October 4, 2011. The Nasdaq, meanwhile, finished red on the day. The last time the Dow gained more than 1% and the Nasdaq finished red was September 29, 2011.

Financials were down nearly 3% at their lows, to reverse and close in the green. That type of intraday reversal has happened only five other times in the past four years.

Lastly, the S&P 500 closed more than 2% off its intraday lows. This was rare a few years ago, but is becoming much more normal as volatility continues to ramp up. In fact, this is already the fourth time in 2016 this has happened, versus five for all of 2015, and five combined in 2013 and 2014.

The S&P 500 Closing 2% or More off Intraday Lows Is Becoming More Common with Heightened Volatility

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Source: LPL Research, StockCharts 02/04/16

The performance data presented represents past performance and is no guarantee of future results.

All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

 

IMPORTANT DISCLOSURES

Past performance is no guarantee of future results.

The economic forecasts set forth in the presentation may not develop as predicted.

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. All performance referenced is historical and is no guarantee of future results. All indexes are unmanaged and cannot be invested into directly.

Stock investing involves risk including loss of principal.

Because of its narrow focus, specialty sector investing, such as healthcare, financials, or energy, will be subject to greater volatility than investing more broadly across many sectors and companies.

Commodity-linked investments may be more volatile and less liquid than the underlying instruments or measures, and their value may be affected by the performance of the overall commodities baskets as well as weather, geopolitical events, and regulatory developments.

The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Dow Jones Industrial Average Index is comprised of U.S.-listed stocks of companies that produce other (non-transportation and non-utility) goods and services. The Dow Jones industrial averages are maintained by editors of The Wall Street Journal. While the stock selection process is somewhat subjective, a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors, and accurately represents the market sectors covered by the average. The Dow Jones averages are unique in that they are price weighted; therefore, their component weightings are affected only by changes in the stocks’ prices.

The Nasdaq Composite Index measures all Nasdaq domestic and non-U.S.-based common stocks listed on the Nasdaq stock market. The index is market-value weighted. This means that each company’s security affects the index in proportion to its market value. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the index. It is not possible to invest directly in an index.

Quantitative easing (QE) refers to the Federal Reserve’s (Fed) current and/or past programs whereby the Fed purchases a set amount of Treasury and/or mortgage-backed securities each month from banks. This inserts more money in the economy (known as easing), which is intended to encourage economic growth.

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