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.
“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]
The S&P 500® Index is a capitalization index of 500 stock-designed to measure performance of the broad domestic economy through changes in the aggregate market value of stock representing all major industries.
The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.
The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes over 2,500 companies, more than most other stock market indexes. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indexes
The MSCI World Index, which is part of The Modern Index Strategy, is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI World benchmark does not offer exposure to emerging markets.
The MSCI Emerging Markets (EM) Index is designed to represent the performance of large- and mid-cap securities in 24 Emerging Markets countries of the Americas, Europe, the Middle East, Africa and Asia. As of December 2017 it had more than 830 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country.
The S&P GSCI Crude Oil index provides investors with a reliable and publicly available benchmark for investment performance in the crude oil market.
Companies in the S&P 500 Sector Indices are classified based on the Global Industry Classification Standard (GICS®).