Market Indexes: It was a down week for the market, as investors were rattled by the spread of the Coronavirus. Energy prices fell, due to speculation that the virus would hamper travel and economic activity in China. Quarterly earnings results buoyed shares of Intel (NASDAQ:INTC) and American Express (NYSE:AXP). Authorities confirmed a second U.S. case of the coronavirus, underlining concerns that the spread of the disease may disrupt travel and trade and slow global economic growth.
Intel shares jumped over 8% on Friday, as the Tech giant surprised to the upside,
Volatility: The VIX rose 20% this week, ending the week at $14.56.
High Dividend Stocks: These high yield stocks go ex-dividend next week: AGNC, CLDT, CLNC, EFC, ENLC, GEL, HTFA.
Market Breadth: 10 out of 30 DOW stocks rose this week, vs. 25 last week. 38% of the S&P 500 rose, vs. 85% last week.
FOREX: The USD rose vs. most major currencies, except the yen and the pound.
Economic News: Existing home sales rose 3.6%, The Markit Mfg. PMI fell to 51.7, vs. the previous 52.4, while Services rose to 53.2, vs. the previous 52.8.
“DAVOS, Switzerland — Top economic policymakers and business leaders from around the world made fairly upbeat predictions for global economic growth this year at the World Economic Forum on Friday, but cautioned that already low interest rates mean there is limited room to respond if new problems arise. Kristalina Georgieva, the managing director of the International Monetary Fund, said the global economy’s prospects had improved noticeably even in the three months since the fund’s annual meeting with the World Bank last October.
That improvement was partly due to a recent lessening of trade tensions. She also cited interest rate cuts by 49 central banks and signs that industrial production around the world was starting to bottom out.
Ms. Georgieva predicted that the global economy would grow 3.3 percent this year and 3.4 percent next year, but cautioned that, “3.3 percent is not a fantastic growth, it is sluggish.” (NY Times)
“Rust Belt states lost manufacturing jobs in 2019 amid trade wars and a strong dollar, even as their labor markets held up more broadly, data showed Friday.
Pennsylvania recorded a drop of about 5,700 factory positions, while Wisconsin lost 4,100 and Michigan was down 5,300, though overall employment increased in those states, according to the Labor Department. National numbers released earlier this month showed that the U.S. added 46,000 manufacturing jobs in 2019, the second-weakest performance since 2009.” (Bloomberg)
Week Ahead Highlights: Q4 ’19 Earnings season goes full tilt, with with DOW stocks reporting, including AAPL, MSFT, XOM, V, BA and MCD, among others. GE will also report. There will be a Fed press conference, and we’ll also see an estimate for Q4 ’19 GDP – the forecast is for 2.1% growth.
Next Week’s US Economic Reports:
Sectors: Utilities and Telecoms led this week; Energy lagged.
Futures: WTI Crude fell -7.5% this week, finishing at $54.19, as the effect of higher Middle East tensions and the OPEC cuts faded. WTI Crude March delivery fell $1.40, or 2.5%, to end at $54.19 a barrel on the New York Mercantile Exchange, after hitting the lowest level for a most-active contract since late October.
The steep weekly decline over concerns that the corona virus in the world’s second-largest oil consumer China will spread farther, curbing travel and oil demand. The virus has prompted the suspension of public transport in 10 Chinese cities, while cases of infection have been found in several other Asian countries and the United States.” (Reuters)
