Your Thursday Market Blip 2/20/20

Your Thursday Market Blip 2/20/20

Coronavirus, and news that the Fed is not likely to lower interest rates, gave brief caution to investors and saw stocks trade off sharply early in the day. Traders rotated out of the growth and “momentum” stocks, such as healthcare and tech, and into bonds and value oriented investments like real estate, energy, and utilities. The Dow was off 388 points early, but then rebounded to close off 128 points. The rebound shows that there is still a good amount of confidence in the U.S. economy, given the continued growth, mild inflation, and low unemployment.
It appears that Morgan Stanley has been suffering from a little bit of FOMO. Three months ago, Schwab bought TD Ameritrade, and today, Morgan Stanley announced that they will buy E*Trade for $13 billion. The proposed deal pushed shares of E*Trade up 23% and simultaneously pushed Morgan Stanley shares down 4%. Considering Morgan’s Wall Street culture and E*Trade’s tech culture, it will be interesting to see if Morgan employees are wearing hoodies over their suits, or if E*Trade employees will be wearing ties over their hoodies.
Domino’s Pizza saw their shares jump 25% today after reporting better than expected earnings. While most places are boarding up locations in response to the demand for more delivered food, Domino’s has actually been increasing locations in order to shorten delivery times. They’ve also been coupling the strategy of store location convenience to encourage more in store pick up sales. It seems to be working, because last night for the first time in 15 years, I ordered a pizza from Domino’s – and yes, the sale required that I pick up the pizza at the store. Domino’s what will you have me do next?