US Stock Market Overview – Stocks Drop as Volatility Surges on COVID FearsNew Home Sales fall more than expected
US stocks moved lower on Monday as the fear that the coronavirus is respreading overwhelmed positive sentiment. With the election only 8-days away, the markets are preparing for additional volatility. All sectors in the S&P 500 index were lower, led down by Energy shares, Utilities were the best performing sector in a down tape. This week will be packed with earnings releases. Approximately 185 companies in the S&P 500 index are expected to release earnings in the last week of October. Some of the largest technology companies such as Apple and Amazon are expected to release financial results on Thursday. New Home Sales came in weaker than expected which weighed on US yields. The VIX volatility index surged higher rising more than 20% at the highs of the trading session. The dollar moved higher as risk aversion took hold.
The Trend in COVID cases Accelerates Higher
The US saw more than 83,000 new infections on both Friday and Saturday surpassing a previous record of roughly 77,300 cases set in July, according to data from Johns Hopkins University. The data also showed the country has reported an average of 68,767 cases per day over the past seven days, which was also a record. Concerns that the spread will generate the need to shut down the economy has weighed on stock prices.
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New Home Sales Declined More than Expected
US new home sales decreased by 3.5% to an annual rate of 959,000 units last month, according to the Commerce Department. This followed a surge in August which was the highest pace of sales in 14 years of August. The data was weaker than expected as consensus forecasts were calling for a sales rate of around 1.025 million units. New home sales are a leading indicator as they are counted at the signing of a contract.