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MARKET MONITOR 
|
February 21

MARKET MONITOR

Chart of the Week


EQUITIES

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.

Source: FactSet and GSAM. As of February 14th, 2020.

Market Summary


GLOBAL EQUITIES

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

COMMODITIES

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

FIXED INCOME

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

FX

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

Economic Summary


PRODUCTION

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

MANUFACTURING

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

POLICY

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

INFLATION

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

Style Performance


US Equity Size & Style Returns

MONTH-TO-DATE

Large
2.94%
4.91% *
4.58%
Medium
3.41%
3.67%
4.05%
Small
3.18%
5.16% *
4.91%
Value
Core
Growth

YEAR-TO-DATE

Large
0.73%
5.02% *
6.92%
Medium
1.40%
2.84%
5.02%
Small
-2.38%
1.79% *
3.75%
Value
Core
Growth

MSCI World Size & Style Returns

MONTH-TO-DATE

Large
1.87%
2.80%
3.72%
Medium
1.90%
2.04%
2.15%
Small
1.53%
2.39%
3.22%
Value
Core
Growth

YEAR-TO-DATE

Large
-1.13%
2.29%
5.85%
Medium
-0.92%
0.84%
2.25%
Small
-2.45%
-0.45%
1.53%
Value
Core
Growth

US Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
0.07%
0.13%
1.87%
Corporate
0.19%
0.34%
1.61%
High Yield
0.92%
1.08%
3.27%
Short
Intermed.
Long

YEAR-TO-DATE

Government
0.97%
1.56%
8.84%
Corporate
1.07%
1.80%
5.64%
High Yield
0.97%
1.02%
4.90%
Short
Intermed.
Long

European Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
-0.03%
0.03%
0.94%
Corporate
0.03%
0.17%
0.45%
High Yield
0.96%
??????
??????
Short
Intermed.
Long

YEAR-TO-DATE

Government
0.08%
1.46%
6.36%
Corporate
0.18%
1.43%
4.02%
High Yield
1.17%
??????
??????
Short
Intermed.
Long

Source: Bloomberg, Barclays and GSAM (as of 02/21/20)

VIEW LESS DISCLOSURE

Key Economic Releases


Monday, Feb 24

Tuesday, Feb 25

Wednesday, Feb 26

Thursday, Feb 27

Eurozone M3 Supply (Cons: 5.3%, Prior: 5.0%)

Friday, Feb 28

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)

VIEW LESS DISCLOSURE

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