U.S. and World News
- Investors across the world have started to panic as new cases of the coronavirus have started to flare up outside of China. The virus has spread to 49 countries, with epidemics emerging in Iran, Italy and South Korea, where the number of people diagnosed with the virus is growing at a rapid pace. The World Health Organization held a press conference this morning where they declared that the virus poses a “very high” risk at a global level and earlier this week the Center of Disease Control warned that the coronavirus is “likely” to spread across the United States. The CDC reported on Wednesday the first case of “community spread” within the United States when a California man contracted the virus without having any prior travel links or contact with any people diagnosed with the virus. In a press conference Wednesday night, President Trump told reporters that the risk to Americans was “very, very low” and placed Vice President Mike Pence in charge of the U.S. response. Last night, Switzerland announced a ban on all events over 1,000 people and Saudi Arabia stated that foreign visitors to Mecca is no longer allowed as countries are increasingly taking stronger measures to prevent the spread.
- President Donald Trump traveled to India earlier this week to continue ongoing trade negotiations with Indian Prime Minister Narendra Modi. The President and Modi have agreed to “promptly” conclude trade negotiations that could potentially lead to a bilateral U.S. – India trade deal. During the trip, the United States secured a sale of $3 billion in military equipment to India. The two countries have been communicating for months regarding tariff rates, farm goods, medical devices, and digital trade. President Trump stated earlier this week that “India is probably the highest tariff nation in the world”.
- Coronavirus fears gripped markets this week triggering steep declines. The S&P 500 fell 11.44% and closed at 2,954. The Dow Jones dropped 12.26% and closed at 25,409. Year-to-date, the S&P is down 8.24% and the Dow Jones is down 10.51%.
- Yields dropped to record lows this week. The 5 year and 10 year U.S. Treasury Notes are yielding 0.94% and 1.16%, respectively.
- The spot price of WTI Crude fell this week. Prices dropped 15.19% and closed at $45.27 per barrel. Year to date, Oil prices are down 25.86%.
- The spot price of Gold fell by 3.55% and closed at $1,585.00 per ounce. Year to date, Gold prices are up 4.46%.
- Initial jobless claims rose by 8,000 to 219,000 and the four-week moving average of claims rose 1,000 to 210,000. Claims rose by 4,000 in Illinois and New York.
- Personal consumption rose by 1.7%, in-line with expectations
- New orders for durable goods fell by 0.2% versus expectations for a decline of 1.4%
- Durable goods ex-transports rose by 0.9% versus expectations for an increases of 0.2%
- Core capital goods orders rose by 1.1% versus expectations for an increase of 0.1%
- Core capital goods shipments rose by 1.1% versus expectations for no change
- The Conference Board index of consumer confidence rose 0.3 points to 130.7 versus expectations for a reading of 132.2
- Sales of new single-family homes increased by 7.9% to a seasonally-adjusted annualized rate of 764k units versus expectations for a reading of 718k
- Pending home sales rose by 5.2% versus expectations for an increase of 3.0%
- Personal income rose by 0.6% versus expectations for an increase of 0.4%
- Personal spending rose by 0.2% versus expectations for an increase of 0.3%
- The PCE price index rose by 0.1% versus expectations for an increase of 0.2% and the year-over-year rate rose 1.7% versus expectations for an increase of 1.8%
- The core PCE price index rose by 0.1% versus expectations for an increase of 0.2% and the year-over-year rate rose by 1.6% versus expectations for an increase of 1.7%
- The University of Michigan’s index of consumer sentiment rose 0.1 points to 101.0 versus expectations for a reading of 100.7
Fact of the Week
The S&P 500 and the Dow Jones posted their largest one-week losses since 2008. Despite this fall, the S&P is up 6.1% over the last year. (Source: Bloomberg)
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