Week in Review 3/6/2020

U.S. equity markets were rocked by volatility this week as the Dow posted an 800-point drop sandwiched between two days of 1,100-point gains. The S&P rallied in the last half-hour of trading, gaining on last week’s close. Investors continued to pour into treasuries and gold, sending the 10-Year Treasury yield below 0.7% for the first time. Global unease about coronavirus continue to impact markets and demand despite some central banks announcing rate cuts and US Congress approving an $8B expenditure to combat the virus.
As of Friday, the World Health Organization had reported 102,000 cases of coronavirus globally and over 3,400 deaths. The virus has now spread to every continent with the exception of Antarctica. Cities began to cancel music festivals, conferences, and move university courses online after California saw a spike of infections and New York cases doubled overnight. Supply issues with test kits in the US, coupled with the two-week incubation period, are causing worry about how many people actually have the virus but are untested.
Oil had a volatile week as Saudi Arabia and Russia quarreled over whether larger production cuts are necessary in order to offset decreased demand. US oil fell 10% after Russia announced that it would not sign OPEC’s plan to cut crude production, marking its worst one-day drop since 2014.
Through Friday, 98% of S&P 500 companies had reported fourth quarter earnings. 70% of companies have beaten their earnings estimate and 64% have beaten their revenue estimates. Over the course of the week, the projected earnings growth changed to an estimated earnings decline of -0.1%.