| Wednesday's Headlines 1. U.S. markets surge on policy moves and healthcare hopes 2. Congress approves $8B funding package to combat virus 3. The IMF pledges $50B in corona-aid 4. Mortgage applications surge and home building stocks celebrate Markets Closed
 Markets Today What a difference a day makes—especially these days. U.S. markets ripped higher with the DJIA surging more than 1,100 points, or 4.5%, and the S&P 500 and Nasdaq closing 4.2% and 3.9% higher, respectively. Markets were trending higher all day, and there could be a lot of reasons for that.
1 – The Fed's emergency rate cut yesterday may have been just the first of at least one more to come in the following weeks. It was also a sign of sacrifice to other central banks, showing that the U.S. is willing to exert its influential monetary policy to help shore up the global economy in this time of emergency. The ECB is meeting later this week and will likely lower rates as well.
2 – The U.S. Congress and the IMF have collectively pledged $58 billion to combat the spread of the coronavirus. Money might not halt the spread of the virus, but it's good for the businesses that are trying to do that.
3 – Joe Biden's big Super Tuesday. Typically we don't put too much emphasis on presidential politics, but U.S. market futures turned bright green last night when it became apparent that Biden was having a successful primary day. Healthcare stocks soared as investors may be betting on the notion that if Biden wins the White House, he will keep the Affordable Care Act, aka Obamacare, in place. That's been beneficial to health insurance companies and healthcare providers since it mandates that all Americans have coverage.
4 – Stocks were keeping pretty cheap, relatively speaking. Especially the big tech stocks like Apple, Amazon, and Microsoft. Stocks and major market indexes are still expensive from a forward price to earnings standpoint, but that has proved to not be a deterrent for hungry investors in search of yield.
Have we hit the bottom? I have no idea and neither does anyone else. Wild trading days with 3%–4% swings are not normal, so my guess is that we are still in the thick of things.
Here's what the last 10 days have looked like for the major U.S. market indexes:  chart courtesy YCharts
Headlines:
photo courtesy MGMUniversal  Volatility Reins To state the obvious, markets have been kind of volatile lately. That's great for traders who like to dive in and out of stocks as they break through their moving averages to the up and downside. It's a bit nauseating for long-term investors who like things the Goldilocks does... not too hot, but just right. But the fears around the coronavirus and the global economic response to it has made for some wild swings in the past week.  The chart above, from the Federal Reserve's database, shows that volatility around S&P 500 stocks and the index is nearly double what it was in the turbulent days of the trade war with China. That seems like ages ago, but at the time, markets were highly volatile. The past week has been nothing short of extreme.  Healthcare and Homebuilders Two sectors that really caught fire in recent days are healthcare and homebuilders. Joe Biden's Super Tuesday primary victories may be behind healthcare's rise as I explained earlier. We looked at Vanguard's VHT ETF, which contains insurers like United Health (UH), which spiked 10% today, as well as pharma companies like Eli Lilly and Merck, among others. It's up nearly 3% in the past five days and has managed to avoid some of the major sell-offs that plagued the broader market recently.
Homebuilder stocks have been on the rise as mortgage and refinance applications have risen dramatically as interest rates have been declining. Weekly refinance applications soared 26% last week compared with the week prior, according to the Mortgage Bankers Association. Total mortgage applications were up 15.1%. These figures are expected to rise after the Fed cut interest rates by 0.5% and 10-year U.S. Treasury yields fell below 1% for the first time yesterday.
For homebuilders, we look at the iShares ITB ETF, which contains homebuilders like Pulte Group and Lennar, but also includes Home Depot and Sherwin Williams, the paint company. That's up more than 3% over the past five days.
Put those two ETFs in your watchlists to see if the trend holds.
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(chart courtesy YCHARTS)  Shares of Newmont rose by more than 6% today after the gold mining company announced three significant tender offers, each set to expire on March 31, 2020. Despite suffering a massive 22% fall yesterday, Trane Technologies' stock price has begun to recover, having increased by over 5%.  SVB Financial Group and Raymond James were the two U.S. banks most impacted by the stock market correction spurred by the coronavirus, dropping more than 8% and over 7%, respectively. Other businesses in the financial realm, such as Charles Schwab (down by almost 9%) and Comerica (over 7%), were similarly affected. Word of the Day Dovish monetary policies usually involve favoring low interest rates. Doves tend to support low interest rates and an expansionary monetary policy because they value indicators like low unemployment over keeping inflation low. If an economist suggests that inflation has few negative effects or calls for quantitative easing, then they are often called a dove or labeled as dovish.  Today in History March 4, 1957: Standard & Poor's Corp. introduces a new stock index, which it initially calls the "Standard '500' Index." Now known as the S&P 500, the index uses a "scientific weighting formula" that enables investors to measure the movement in the total value of most of America's major stocks.
S&P 500 1999/2000 Directory (Standard & Poor's, New York, 1999), p. 7.
Bonus Chart: S&P 500 Since 1957. 18,000% Return 
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Wednesday, March 4, 2020
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