Week In Review 2.18.2020

U.S. equity markets ended the week higher again as the S&P, Nasdaq Composite, Dow Jones Industrial Average, and ACWI hit record highs. The S&P logged its second consecutive weekly gain while bonds slipped amidst positive earnings results and “manageable uncertainty” about coronavirus impacts. Equity indices in Shanghai and Hong Kong rose above other Asia Pacific benchmarks as hundreds of thousands of workers returned to work this week in China. The People’s Bank of China also announced reverse-repurchase agreements in an attempt to maintain liquidity which boosted Chinese equities and favorably impacted investor sentiment.

As of Friday, the World Health Organization had reported 64,000 cases of coronavirus and over 1,400 deaths. Nearly 35% of scheduled flights in and out of China were cancelled in the last 20 days and a cruise ship with confirmed cases aboard that had been stranded at sea for over two weeks was finally admitted into a port in Cambodia. Reports out of the Hubei province did indicate, however, that rates of infection had slowed.

The Euro fell earlier this week as Angela Merkel’s succession plan collapsed. The British Pound also appreciated in response to chancellor Javid resigning amidst Boris Johnson’s cabinet reshuffling. Oil saw a modest comeback after weeks of stagnant pricing despite OPEC cutting forecasts for global demand.

Through Friday, 385 S&P 500 companies had reported fourth quarter earnings. So far, 71% of companies have beaten their earnings estimate. Fourth quarter earnings growth is currently forecasted to be 0.9%.