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MARKET MONITOR 
|
April 3

MARKET MONITOR

Chart of the Week


EQUITIES

March, the worst month for US equities since the financial crisis, also had the best three-day stretch since the 1930s. Today we face unprecedented economic challenges and market volatility. As investors in the middle of a tempest, one thing we can manage is time. As the CoW shows, time in the market can be especially important as the good days may continue to cluster near the bad.

Source: Bloomberg and GSAM. As of April 2, 2020.

Market Summary


GLOBAL EQUITIES

Markets struggled to find direction last week as trading seesawed amid a policy void. As global fiscal and monetary policy transition from announcement to implementation, markets advanced on talks of a next round of stimulus and on signs of an oil deal, and declined on the implications of extended physical distancing. The S&P 500 ended down -2.02% while the FTSE 100 and Euro STOXX 600 fell -2.02% and -0.49%, respectively. Read More

COMMODITIES

Oil prices surged as prospects of an OPEC+ deal brightened the same week as the original production cuts expired. At the behest of President Trump, Saudi Arabia called an urgent meeting of the OPEC+ alliance to discuss a “fair agreement” to end the price war with Russia and strike a deal that would likely depend on US involvement. After hovering around well-head costs ($20/bbl), Brent crude and WTI prices rallied 36.82% and 31.75%, respectively. Read More

FIXED INCOME

Global government yields continued to follow COVID-19 developments, related policy impacts, and oil price war progress. US Treasury yields rebounded late in the week as the market shrugged off record high US weekly jobless claims and was buoyed by hopes for a Saudi-Russia truce. Still, the 10-Year and 2-Year Treasury ended -15bps and -5bps lower, respectively. Meanwhile, German Bund yields rose and the spread between the 10-Year Treasury and Bund yields narrowed to 100bps midweek, the tightest point in six years. Read More

FX

The US dollar re-strengthened against peers on the back of higher oil prices and investors moving towards safe-haven assets. The US Dollar Index jumped 1.78%. Meanwhile, delayed policy decisions in the euro zone have weakened the euro, which fell -2.77% against the dollar.  Read More

Economic Summary


JOBS

Economic fallout from COVID-19 was evident in March labor data. US initial jobless claims set another record, rising to 6.6 million. The unemployment rate rose to 4.4% from a record low of 3.5% in February, and nonfarm payrolls decreased (by -701k) for the first time in nearly a decade. Notably, the survey period ended on March 12, before much of the US began near-shutdown. In France, 4 million workers have been laid off in the past two weeks while Spain recorded its highest increase in unemployment (+800k) in March. In the UK, almost 1 million people have applied for universal credit. Read More

ACTIVITY

US ISM data declined in March, but fared much better than economists forecasted as the data just begins to pick up the activity slowdown. ISM manufacturing fell into contractionary territory at 49.1 while the services sector slowed but held expansionary territory at 52.5, higher than the expected level of 45. However, steep declines in new orders and employment indicated further room to fall. In China, March Caixin manufacturing PMI index improved to 50.1, but saw new orders, export orders, and employment still in contraction. Meanwhile China services remained in contraction at 43. Read More

Style Performance


US Equity Size & Style Returns

MONTH-TO-DATE

Large
-3.96%
-4.03%
-4.09%
Medium
-6.58%
-6.00%
-5.26%
Small
-9.49%
-8.75%
-8.14%
Value
Core
Growth

YEAR-TO-DATE

Large
-29.63%
-23.44%
-17.61%
Medium
-36.20%
-31.45%
-24.24%
Small
-41.77%
-36.69%
-31.81%
Value
Core
Growth

MSCI World Size & Style Returns

MONTH-TO-DATE

Large
-3.48%
-3.77%
-4.03%
Medium
-7.14%
-5.78%
-4.87%
Small
-7.50%
-6.99%
-6.55%
Value
Core
Growth

YEAR-TO-DATE

Large
-28.50%
-23.03%
-17.37%
Medium
-37.69%
-30.49%
-24.75%
Small
-39.74%
-34.95%
-30.23%
Value
Core
Growth

US Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
0.04%
0.17%
2.91%
Corporate
-0.09%
-0.22%
-0.38%
High Yield
-2.04%
-2.16%
-0.43%
Short
Intermed.
Long

YEAR-TO-DATE

Government
3.86%
5.42%
24.43%
Corporate
-2.28%
-3.36%
-4.88%
High Yield
-14.49%
-14.49%
-14.02%
Short
Intermed.
Long

European Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
-0.15%
-0.35%
-0.00%
Corporate
-0.07%
-0.15%
-0.01%
High Yield
-0.15%
??????
??????
Short
Intermed.
Long

YEAR-TO-DATE

Government
-0.49%
-0.60%
1.34%
Corporate
-2.94%
-7.17%
-10.94%
High Yield
-14.97%
??????
??????
Short
Intermed.
Long

Source: Bloomberg, Barclays and GSAM (as of 04/03/20)

VIEW LESS DISCLOSURE

Key Economic Releases


Monday, Apr 06

Tuesday, Apr 07

German IP MoM (Cons: -0.9%, Prior: 3.0%)

Wednesday, Apr 08

Thursday, Apr 09

US Jobless Claims (Cons: 5000k, Prior: 6648k)
UMich Cons. Sent. (Cons: 75.0, Prior: 89.1)
UK IP MoM (Cons: 0.1%, Prior: -0.1%)

Friday, Apr 10

US Core CPI (Cons: 2.3%, Prior: 2.4%)

VIEW LESS DISCLOSURE

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