March 2, 2020

Weekly Market Commentary February 24th to February 28th 2020

Equity markets sold off throughout the week with the S&P 500 Index moving into correction territory (a decline of greater than 10%). In a rapid shift in sentiment from all-time highs reached only last week, the key U.S. equity index has declined rapidly over the last seven trading sessions on concerns relating to the spread of the Covid-19 Coronavirus. A detailed review of recent market volatility relative to the outbreak of the virus can be read here.

The S&P 500 Index closed down on the week by -11.5% to 2,954. The Nasdaq composite slid by -10.6% to 8,657.

New Home Sales beat expectations with 764k annualized for January and December’s figure revised up to 708k. This month-over-month jump of 7.9% was partially fueled by unseasonably warm temperatures. Pending Home Sales also increased by 5.2% on the month.

The second revision of 4th quarter GDP held steady at 2.10%. While the preliminary print of Durable Goods Orders for January was negative at -0.2%, it exceeded the -1.4% estimate. The December Durable Goods Orders were also revised up to 2.9% from 2.4%.

This week has seen unprecedented levels of demand for U.S. Treasuries. As investors bid up safe haven bonds to move away from riskier assets, yields have declined to new lows. The 30-Year U.S. Treasury shattered its previous all-time low yield of 1.89% last week by trading down to 1.64%, finally ending the week at 1.68%. The 10-Year U.S. Treasury yield fell to 1.12% during trading and closed the week at 1.16%. The 2-Year U.S. Treasury remarkably fell below 1%, ending the week at 0.93%.

Check back next week when key indicator releases focus around employment and manufacturing metrics. These indicators include the Unemployment Rate, Nonfarm Payrolls, ISM Manufacturing and Non-Manufacturing, Factory Orders, Final Durable Goods Orders, and Capital Goods Orders.