Only 38% of S&P 500 companies, out of 364 companies analyzed, have explicitly referenced the coronavirus on their Q4 earnings call transcripts. Sectors such as industrials and info tech cited greater concern over the virus' impact. We believe risk management and security selection remain key as the situation evolves.
Global markets remained volatile this past week as investors continued to digest developments over the coronavirus. The S&P 500 retreated after hitting a record high mid-week as investors bet that the impact of the virus would remain contained, eventually ending the week 1.22% lower. Meanwhile, European stocks pulled back as news of growing coronavirus cases offset signs of an improving economy. The pan-European Euro Stoxx 600 edged lower 0.53% for the week. Read More
The US Energy Information Administration (EIA) reported a smaller-than-expected rise in crude stocks (+414K barrels) for the week of February 10. Yet oil price gains were capped by persistent virus concerns and escalation of US sanctions against Venezuela. Brent and WTI crude prices both ended higher, with Brent ending at $58.50 per barrel. Read More
Global yields resumed their fall last week as coronavirus concerns continued to linger. With the Federal Reserve (Fed) identifying the coronavirus outbreak as a new risk to the global growth outlook in their January minutes, 30-Year Treasury yields approached all-time lows ending the week at 1.92%, as 2-Year and 10-Year Treasury yields also tumbled. Meanwhile, mixed economic signals in Europe dragged 10-Year German bund yield down 3 basis points. Read More
The US Dollar Index jumped 0.2% last week as investors sought relative stability amid global uncertainties. The dollar advanced 1.67% against the Japanese yen as efforts to limit the spread of the coronavirus in Japan weighed on economic activity. The dollar also rallied 0.45% against the British pound, as the risk that the UK exits the EU on generic World Trade Organization terms outweighed solid UK economic prints. Read More
January US Producer Prices rose more-than-expected by 0.5% (+2.1% YoY), up from 0.2% (+1.3% YoY) in December, driven by services costs such as health care and hotel accommodations. The euro area’s February flash composite PMI rose 0.3pt to 51.6, hitting a 6-month high and surprising to the upside, driven by stronger domestic orders, improvement in manufacturing output and services business activity. Read More
The Philly Fed Manufacturing Index jumped to 36.7 in February from 17.0 in January, driven primarily by new orders (+15pt), to its highest level since May 2018. Read More
Fed minutes in January cited improving economic activity, continued hiring, and firming inflation, as signs of “cautious optimism” about the US economy. Though the distribution of risks to the outlook have become more favorable, officials indicated that rates would remain on hold for the time being. Read More
January’s UK core Consumer Price Index rose to +1.6% YoY, slightly above consensus but still undershooting the Bank of England’s 1.7% projection, with “housing and household services” being the biggest contributor. We maintain our view policy will remain on hold this year. Read More
For style performance, Large, Mid, and Small refer to the Russell 1000, Russell Midcap, and Russell 2000 indices, respectively. Value refers to companies with lower price-to-book ratios and lower expected growth values, and Growth refers to higher price-to-book ratios and higher forecasted growth values. Government, Corporate, and High Yield refer to the US Treasury index, the US Corporate Credit index, and the US High Yield index, respectively. Short, Intermediate, and Long refer to the Short, Intermediate, and Long segments of their respective curves. Quality returns refers to the credit quality of asset classes ranging from Government, highest quality, to High Yield, lowest quality.
Eurozone M3 Supply (Cons: 5.3%, Prior: 5.0%)
US PCE (Cons: 1.7%, Prior: 1.6%)
US Core PCE (Cons: 1.7%, Prior: 1.6%)
China Manuf. PMI (Cons: 47.4, Prior: 50.0)
“Euro PMI” refers to the Markit Eurozone Composite Purchasing Managers’ Index. “Cons. Conf.” refers to US Consumer Confidence. “GE IFO Business” refers to the German Ifo Business Climate Survey. “New Home Sales” refers to US New Home Sales (MoM). “Dur. Gd. Ord.” refers to US Durable Goods Orders. “UK GDP” refers to the QoQ estimate of the United Kingdom’s Gross Domestic Product for Q3. “Euro M3” refers to the YoY change in the Eurozone’s M3 Money Stock. “US GDP” refers to the estimate of US Gross Domestic Product for Q3. “Pers. Cons.” refers to US Personal Consumption. “UMich Cons. Sent.” refers to the University of Michigan Consumer Sentiment Index. “Japan Core-Core CPI” refers to Japan’s Consumer Price Index (ex- Food, Energy YoY).
Access the full PDF to use with your clients
Get the latest Market Monitor delivered to your inbox as soon as it publishes