Market Update: Wed, Mar 4, 2020 | LPL Financial Research


Big bounce on tap for stocks. After a nearly 3% drop Tuesday, stocks opened sharply higher in the United States after the number of COVID-19 cases in China dropped once again to the lowest level since January 20, and market participants updated their assessments of the Democratic presidential primary results from Super Tuesday. Additionally, positive Eurozone and United Kingdom services Purchasing Managers Index (PMI) data along with better-than-expected Eurozone and German retail sales helped calm fears of a global slowdown.

The Fed emergency cut added to fears. The Federal Reserve (Fed) cut rates 50 basis points (.50%) yesterday in a rare intra-meeting action. This first non-meeting cut since 2008 failed to buoy market sentiment. Market participants questioned why the Fed couldn’t wait two more weeks until its next meeting, wondering if conditions were bad enough to justify the move. It is expected that the Fed may cut again at its next meeting March 17-18, based on fed funds futures prices. For more of our reaction to the Fed move yesterday, please read our March 3 blog.

Biden outperforms in Super Tuesday. One week ago it looked like Bernie Sanders was going to run away with the Democratic nomination, but Super Tuesday’s better-than-expected results for Joe Biden indicate it is still a two-person race. So far, results show that Biden has won 9 states to take the delegate lead, and Bernie Sanders has won 4. (Maine results were not final as of 9:30 a.m. ET.)

Bad start to 2020 has bulls worried. The S&P 500 Index closed lower in both January and February 2020. Historically, when that has occurred, the returns over the rest of the year have been substantially weaker, up only 2.2% on average compared to a 12.2% gain when the first two months have been higher. We will discuss this potential worry on the LPL Research blog later today.



This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This Research material was prepared by LPL Financial, LLC.

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).

Insurance products are offered through LPL or its licensed affiliates.  To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.

  • Not Insured by FDIC/NCUA or Any Other Government Agency
  • Not Bank/Credit Union Guaranteed
  • Not Bank/Credit Union Deposits or Obligations
  • May Lose Value

For Public Use – Tracking 1-960046