With the war between Russia and Ukraine escalating today, investors are wondering how the sanctions will impact stocks. For that reason, stocks are continuing their decline today. Let’s look at the stats and see what they can tell investors.
Afternoon Stats And Outlook
All indexes are lower and will close in the red.
New York / S&P
As of 1:30 PM, 30% of all volume is actually buying while 69% is selling. Basically 3 to 1 for sellers.
Volume is already at 3.4 billion which is above average. The index is down 75 points which is poor but lately we have seen larger declines. The afternoon could see a bounce or a bigger drop.
58% of all stocks are declining but 37% are advancing which means roughly a third of the index is still climbing or at least not falling. Financial stocks are helping drag the market lower. Banks in particular do not need to rally but they need to stop falling to support the market, otherwise the indexes will keep declining.
At 1:30 there are 169 new 52 week lows but there are 150 new 52 week highs as commodity stocks in particular are climbing.
Outlook though is bearish.
NASDAQ
The NASDAQ is about the same as New York with 36% of all volume buying while 63% are selling. 34% of all stocks are rising while 57% are declining.
Volume is already 4 billion so well above average trading.
The index is down 208 points which is heavy but we have seen far worse days.
As of 1:30 there are 181 new 52 week lows and 62 new highs. Basically 3:1 for decliners which remains bearish.
Overall the index once again needs financial stocks to stop falling before it will stabilize. Once that happens or if there is any kind of peace agreement, stocks will soar.
TSX Composite Index – Canadian Stock Market Outlook
Bank stocks, which comprise 25% of the index, are down slightly but nothing like we are seeing in US banks. It is believes Canadian Banks have limited exposure to Russia or Ukraine. Any chance that changes and Canadian banks could move lower probably by 10 to 15 percent.
The index is much stronger than the bigger US markets. 50% of all volume is buying and 47% are selling. There are 70 new 52 week highs and 50 new lows.
Volume is 326 million shares which is above average.
While the outlook is negative the TSX is still clinging to the 21,000 valuation. Today it is down 152 points to 20,974, but overall we have seen this level repeatedly and there are no indications the market will pullback dramatically this week.
Morgan Stanley Analysis – Bear Market
More analysts are calling this a rotating bear market with more stocks down 25% or more and almost half the market now either at or below their respective 200 day moving averages.
Outlook
We should see some kind of bounce in the afternoon but selling remains about 3 to 1 which means the month of March is starting poorly. Almost always when the first few days of March have been poor, the month has also been poor. A resolution to the Ukraine – Russia war seems slim at this point. That means markets will remain very volatile.
Just remember, the lower stocks go, the bigger the bounce will be when it comes but that could be weeks away. It’s anyone’s guess. Right now the technical indicators are advising more selling lies ahead but we will still see bounces this week.
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