It’s been a week of positive returns in domestic equity markets, and that feels good to write. The S&P 500 return over the week was 3.27%. This comes on the heels of the potential passage of stimulatory fiscal and monetary actions.
Markets continue to sell-off as the western world shuts down business to minimize the spread of COVID-19 (coronavirus). The S&P 500 was down 12.5% on the week and held up better than other global indices.
Global equities sold off sharply on the week as COVID-19 (coronavirus) headlines accelerated and became more dire. The S&P 500 was down 12.4% on the week while small caps fell more than 17%.
It has been a see-saw week with equity markets seeing both highs and lows. The coronavirus and reactions to the virus continue to significantly impact performance of investment markets. Equity markets took a big dip last Thursday, after global increases in the number of coronavirus cases was reported.
Yesterday’s Insight Extra featured commentary surrounding the coronavirus. Therefore, we won’t dive too deep on that topic again today. We will, however, discuss the impact on S&P 500 one-week performance.
The impact of the Coronavirus on the U.S equity markets was somewhat muted this week. The S&P 500 saw a gain of 0.40%. A contributing factor to the gain is better than expected earnings reports from U.S companies.
Global equities were positive on the week. The S&P 500 gained 1.4% and outpaced small cap domestic stocks. Emerging markets bounced back a little with gains of 1.9%. The Bloomberg Barclays Aggregate Bond Index gained 0.3% on the week.
The preliminary Gross Domestic Product (GDP) growth number for the fourth quarter of 2019 was released this week. Slow growth is what was expected, and slow growth is what we got.
Equities turned down as coronavirus fears offered an easy opportunity to take profits. The virus could still be underappreciated given the large number of cases and uncertainty on key attributes.
Fourth quarter earnings reports have started coming in and more companies are beating expectations than not. Close to 12% of S&P 500 companies have announced so far. Of the companies that have announced, 67% reported earnings above consensus, 9% in-line with consensus and 24% below consensus.