The Major Markets rallied last week as Coronavirus fears faded into the background. The greatest gains were in the tech centric Nasdaq. But even the MSCI Emerging Market Index closed higher, reflecting a sense of relief for the Chinese Economy.
While the domestic markets returned to their record setting ways Thursday, the Coronavirus situation is still a long way from being resolved. As of this week, the National Health Commission of the People’s Republic of China reported that over 1,000 people have died due to the virus. This has now surpassed the 773 deaths attributed to the SARS outbreak back in 2003.
China has taken drastic steps to try to control both the spread of the virus as well as its economic impact. After injecting $22 billion dollars into the market early last week, China announced that they would cut tariffs in half on 1,717 U.S. goods, covering an estimated $75 billion of U.S. imports by Valentine’s Day this Friday
The domestic markets loved this overseas news as 10 of the 11 sectors generated gains last week with Utilities being the lone sector seeing losses. It’s still too early to see what the longer-term impact of this outbreak will be both to the Chinese economy, but also to domestic supply chains and ultimately the global GDP.
In the meantime, oil prices dropped again as global demand continues to be weak on the short-term.
In employment news, Thursday’s weekly Jobless Claims fell to the lowest level in 9 months. The positive news continued Friday with the first monthly BLS Employment report of 2020. The reading significantly beat expectations. The 225,000 new non-farm jobs created far surpassed the 164,000 widely expected.
S. C. M. Post, “Wuhan Virus,” SCMP Chronicles. [Online]. Available: https://multimedia.scmp.com/widgets/china/wuhanvirus/. [Accessed: 11-Feb-2020]
“Coronavirus Live Updates: More Than 800 Have Died in China, Surpassing Toll From SARS,” The New York Times, 09-Feb-2020. [Online]. Available: https://www.nytimes.com/2020/02/09/world/asia/coronavirus-china.html. [Accessed: 11-Feb-2020]
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