John Roque, managing partner at Wolfe Research, joins "Squawk Box" to give a technical analysis of Monday's sell-off. Stocks fell on Wednesday as the 10-year Treasury yield traded near record lows amid concerns over the coronavirus spreading even further.
The Dow Jones Industrial Average traded 176 points lower, or 0.6% after being up as much as 461.42 points, or 1.7%, earlier in the session. The 30-stcok average also traded more than 100 points lower at its session low. The S&P 500 fell 0.6% after rallying more than 1% to start off Wednesday’s session. The Nasdaq Composite was down 0.3% after rising as much as 2%.
Traders appeared to be buying and selling stocks in volatile fashion as headlines concerning the coronavirus were released. The speed of the moves hinted that it could be computer trading driving the action.
The 10-year Treasury yield slid back to 1.314% after hovering around 1.36% earlier in the day. The benchmark rate fell to an all-time low on Tuesday. The earlier bounce in yields eased concerns slightly that the coronavirus would tip the globe into a recession.
Bond yields fell Wednesday after Bloomberg News cited a Food and Drug Administration official saying the coronavirus was on the cusp of a pandemic.
“Unfortunately, I think this is going to turn into a full-blown correction,” David Bianco, chief investment strategist for the Americas at DWS, told CNBC’s “Squawk Box.” “It’s a material impact to our earnings outlook and it’s probably going to be another year of flatish earnings growth.”
The news overnight was not positive in terms of containing the spread of the coronavirus. South Korea reported 169 new cases, bringing the country’s total to 1,146 infected. In Italy, infections now total 325 and cases are now being seen beyond the original epicenter in the north. China reported 406 new confirmed cases, and an additional 52 deaths.
President Donald Trump will hold a news conference at 6 p.m. to address the coronavirus.
“The sensitivity to what we don’t know has really been revealed,” said Jeff Kilburg, CEO of KKM Financial. “These last couple of sessions have really brought out to the surface the potential worst-case scenarios that the virus can spread from continent to continent.”
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