The pre-open economic news today was the big drop in new jobless claims, now at a 14-year low. Interestingly enough, index futures dropped on the news, perhaps because the actual trough in claims in 2000 was on April 15, 2000. It was preceded by the S&P 500 Tech Bubble peak three weeks earlier on March 24th.
Here is an overlay of new jobless claims (inverted) and the S&P 500 since 1990. I've highlighted that 2000 inverse correlation.
The S&P 500 opened lower and sold off to its -1.47% intraday low about 45 minutes later. The index then zigzagged to its 0.73% intraday high in the early afternoon. The volatile session ended by essentially going nowhere, up 0.01% at the close. The 2.23% high-low range was at the 98th percentile of the 200 market days of 2014. Yesterday's 2.94% high-low range was this year's most biggest range.
The yield on the 10-year Note closed at 2.17%, up 2 bps from yesterday.
Today's announcement of the latest 30-Year Fixed Rate Mortgage Average, at 3.97%, is the lowest rate since June of last year.
Here is a 15-minute chart of the past five S&P 500 sessions.
Here is a daily chart of the SPY ETF, which gives us a better picture of investor trading volume. In contrast to the underlying index, the ETF posted a fractional decline. Volume was massive, although off the surge yesterday, which was the biggest since November 2011.
A Perspective on Drawdowns
How close are we to a correction, generally defined as a 10% drawdown from a high (based on daily closes)? The chart below incorporates a percent-off-high calculation to illustrate the drawdowns greater than 5% since the trough in 2009.
For a longer-term perspective, here is a pair of charts based on daily closes starting with the all-time high prior to the Great Recession.
