Weekly Feed5 Mins Read
Kristal Weekly Feed I 17th February 2020
With a busy schedule, it can get difficult to understand and analyze major events around the globe and how they affect your investments. In our weekly market update, we help you slice and dice the latest news updates to make informed investment decisions.
Headlines this week:
- It was a mixed week, with the first three days being good for the markets. However, Thursday and Friday saw most indices shed off some gains on the back of new coronavirus cases in China
- Oil prices recovered from a 13-month low and snapped a 5-week losing streak with the best week of 2020
- Most Chinese factories returned to business this week fostering optimism in the global markets
- News about the White House considering tax incentive for Americans to buy stocks helped the U.S. markets close the week on a positive note
Tracking the 2019-n-CoV
China’s coronavirus now has more than 60,000 confirmed cases in China and the death toll crossing 1350. While the authorities were hoping that the spread of the disease had stopped, around 15000 new cases in China’s Hubei province – the epicenter of the outbreak pulled the brakes on the hopeful market sentiment.
United States: It was a positive start to the week in the U.S. as factories in China slowly returned to business. Also, some technology shares posted good gains and investors shrugged off coronavirus fears and traded with a positive sentiment.
Europe: European markets had a mixed start to the week as fears about the economic impact from the spread of Covid-19 kept the investor sentiment in check.
Asia-Pacific: Most Asian markets started the week in the red with the exception of China on the back of the release of the inflation data for January. China’s producer price index gained 0.1% last month that helped the stocks recover from the earlier slip to close in the green for the day.
Let’s take a look at how the global markets performed during the week.
The U.S. markets carried the momentum of last week’s gains coming into a trade on Monday this week. News about some factories in China re-opening after a long break helped boost investor confidence leading to a rally in the markets. The shutdown of factories in China had led to concerns regarding global economic slowdown and disruption in global supply chains.
On Tuesday, the Nasdaq Composite and S&P 500 reached new highs as investors gained more confidence due to remarks by Chinese health advisors that the outbreak might be peaking. However, the Federal Reserve Chairman’s comments about the economic impact of the disease kept DJI in check. The rally continued for the third day on Wednesday as news about the slowing down of new cases of the virus was met with investor cheer.
The rally was brought to a halt on Thursday as around 15000 new cases of Covid-19 were recorded in a single day. Most indices closed in the red. While the mood was dampened even on Friday, news about the Trump administration considering tax incentives for Americans to buy stocks gave the markets a late boost.
European markets had a mixed start to the week as fears about the economic impact from the spread of Covid-19 kept the investor sentiment in check. Further, news about the German carmaker Daimler, planning to cut around 15,000 jobs and the Storm Ciara causing extreme weather conditions in the UK and northern Europe didn’t do much to boost investor confidence either. On Tuesday, the pan-European Stoxx 600 hit an all-time high for a brief period of time.
The slowing rate of new cases of the disease had a positive impact on European investors too. Wednesday was the best day of the week for European investors as the Stoxx 600 hit a record high and most sectors closed in the positive territory. With news of thousands of new cases recorded in the Hubei province in China hitting the markets, Thursday halted the positive sentiment with most sectors closing in the red. Investors continued to watch the outbreak and its impact on the global economy on Friday as the markets closed lower.
Most major Asian indices slipped on Monday as the fear of the spread of coronavirus gripped investors in the region. However, Chinese markets managed to recover from their earlier losses in the day following the release of Chinese inflation data for January that reported that the producer price index gained 0.1%.
Although uncertainty loomed over the re-opening of factories in China, most markets saw gains on Tuesday. The Japanese markets were closed on account of the National Foundation Day. Wednesday was a good day for stocks in the Asian markets with most indices closing in the green. This was a reflection of the global sentiment that the spread of the disease had peaked. The mood was dampened on Thursday as China reported around 15000 new cases of the disease due to a change in the methodology of identifying the confirmed cases.
Most indices closed in the red with the exception of Taiwan which closed higher as reports about Taiwan’s GDP growing at 3.31% in Q4-2019 hit the markets. Although the spike in the number of new cases weighed on investor sentiment, Asian markets managed to post gains on Friday and close in the green. However, in Japan, the markets fell sharply due to the news of the first death due to Covid-19.
Heading into the next week…
As the world tries to combat the spread of Covid-19, investors are trying to be resilient and focus on corporate earnings to stay optimistic about the global economy. We continue to monitor the situation and are here for any help you may need!
The materials and data contained herein are for information only and shall in no event be construed as an offer to purchase or sell or the solicitation of an offer to purchase or sell any securities in any jurisdiction. Kristal Advisors does not make any representation, undertaking, warranty or guarantee as to the update, completeness, correctness, reliability or accuracy of the materials and data herein. All opinions, forecasts or estimation expressed herein are subject to change without prior notice. Kristal Advisors and its affiliates accept no liability or responsibility whatsoever for any direct or consequential loss and/or damages arising out of or in relation to any use of opinions, forecasts, materials and data contained herein or otherwise arising in connection therewith.
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