For the 2nd week in a row, the Nasdaq lead the pack. This outperformance is reminiscent of what we have seen for much of last year.
Most of the weekly gains were made on Monday as markets experienced continued optimism surrounding the management of the coronavirus situation. However, this sanguinity appeared to fade as the week progressed toward the long holiday weekend. With each passing day, the global death toll climber higher. On Thursday, the reported deaths increased by almost 250, due to a change in how the infections are being defined. As of this week, the official death toll has nearly reached 1900.
After weeks of unsurety regarding the economic impact of the Coronavirus, American businesses located in Asia have stated to cite it as a factor. On Thursday, American Chamber of Commerce members in Vietnam who were surveyed said that they were experiencing difficulty maintaining their supply chains.
Executive Director Adam Sitkoff stated in an interview that:
"More than half of our members in the manufacturing sector are experiencing difficulty sourcing supplies/materials due to disruptions from the coronavirus,"
“Supply chain disruptions and travel restrictions are and will continue to impact many business sectors,”
This past weekend, another survey of 109 American companies in Shanghai showed that 78% did not have enough workers to start full production. And half of those surveyed said that their global operations have already been impacted by the virus.
In his semiannual testimony before congress, Fed Chairman Jerome Powell said that the central bank is “closely monitoring” the coronavirus situation and that the U.S. Economy appears “resilient”
For the time being, the Fed remains unswayed by the news from overseas. “As long as incoming information about the economy remains broadly consistent with this outlook, the current stance of monetary policy will likely remain appropriate,” he said
Rabin, Roni Caryn. “Coronavirus Cases Seemed to Be Leveling Off. Not Anymore.,” February 13, 2020. https://www.nytimes.com/2020/02/12/health/coronavirus-cases-china.html.
“U.S. Firms in Vietnam Hit by Coronavirus Supply Chain Issues: AmCham Survey.” Reuters. Thomson Reuters, February 14, 2020. https://www.reuters.com/article/us-china-health-vietnam-amcham/u-s-firms-in-vietnam-hit-by-coronavirus-supply-chain-issues-amcham-survey-idUSKBN2081EW.
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