1/31/20 Market Notes
After falling as much as 244 points, the Dow Jones Industrial Average, along with other major stock indexes, reversed course to end 125 points higher. The Dow’s 0.43% gain bested the S&P 500’s 0.31% gain and the NASDAQ’s 0.26% gain. Seven of the eleven sectors of the S&P ended in positive territory, led by a 1.25% gain in Financials, followed by a 1.01% gain by the Consumer Staple sector. The benchmark Ten Year Treasury yield ended slightly lower at 1.589%, while the U.S. dollar was mostly unchanged and oil prices declined another ½% to $52.79 per barrel.
Europe, specifically Britain, reported its first case of the coronavirus, as the virus’s death toll in China rises above 200. As a consequence of the rapid spreading of the virus and rising death toll, the World Health Organization (WHO) has declared the coronavirus a global health emergency.
On the economic front, U.S. GDP growth matched expectations in the fourth quarter, rising 2.1% and therefore putting full year 2019 GDP growth at 2.3%, well below the 3%+ forecasted by the Trump administration. On the earnings front, while there have been some impressive beats by companies such as Apple (AAPL), the overall picture remains murky as overall fourth quarter earnings are down 1.5% year-overyear, in line with analyst forecasts.
In addition to more earnings news, investors will be getting the latest housing, inflation and manufacturing data, along with inflation readings. International markets are mostly lower overnight, with the notable exception of the Japanese Nikkei index, which is up by more than 1% at the time of this writing. Premarket U.S. equity futures are pointing to a sharply lower open as investors contend with the economic implications of the spread of the coronavirus.
Disclosures: This market commentary is written by the 1879 Advisors Investment Committee and represents the views of 1879 Advisors. This commentary is not investment advice and should not be used as a basis to make investment decisions. Please consult with your registered investment advisor before making any investment decisions.