Monthly Archives: February 2020

Market Insights 2/28/2020 – Good Bye February

The last time markets suffered a week this bad in 2008, esoteric terms and acronyms, like credit default swaps, CDOs, and CLOs, were littered thorough the financial press, but this week has only one culprit: the coronavirus.

However, today brought the slightest sign of relief as a strong rally in the final minutes of trading eased what had been steep losses and even let the NASDAQ creep into the green. Recent volatility has led to increased expectations that the Fed will take measures to support the market and that the Fed may work in conjunction with other global central banks.

The bond market has responded with record low rates on the longer end of the curve. Economic data offered upbeat reads on personal income, consumer sentiment and regional manufacturing. Global equity indexes suffered heavy losses on the day.

The Markets…

The Dow Jones Industrial Average shed 357 points (1.4%) to 25,409.

The S&P 500 fell 25 points (0.8%) to 2,954.

The tech-focused NASDAQ added 1 point to 8,567.

In heavy volume, 2.5 billion shares were traded on the NYSE and 5.3 billion shares changed hands on the NASDAQ.

WTI oil was down $2.33 to $44.76 per barrel and wholesale gasoline shed $0.02 to $1.40 per gallon.

The Bloomberg gold spot price was down $75.80 to $1,566.70 per ounce.

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—fell 0.4% to 98.11.

For the week, the Dow was down 12.4%, the S&P shed 11.5% and the NASDAQ dropped 10.5%.

Personal income and spending report mixed, consumer sentiment revised higher

Personal income rose 0.6% month-over-month in January, versus the Bloomberg forecast of a 0.4% rise, and compared to December’s downward-revised 0.1% gain. Personal spending gained 0.2%, below forecasts of a 0.3% increase and the prior month’s upwardly-revised 0.4% advance. The January savings rate as a percentage of disposable income was 7.9%.

Treasuries continued to surge, with the yield on the 2-year note plunging 13 basis points to 0.93%, the yield on the 10-year note dropping 10 bps to 1.17%, and the 30-year bond sliding 6 bps to 1.69%. Bond yields remain in a sharp downdraft as the coronavirus concerns foster intensified flight to safety and are suggesting the markets are ramping up expectations that the Fed will be forced to react with monetary policy action.

The February final University of Michigan Consumer Sentiment Index was revised to 101.0, versus expectations for a slight downward adjustment to 100.7 from the preliminary 100.9 reading and above January’s 99.8. The index improved m/m as the current conditions and expectations components of the survey both increased. The 1-year inflation forecast dipped to 2.4% from January’s 2.5% rate, and the 5-10 year inflation forecast declined to 2.3% from the prior month’s 2.5% pace.

Global markets end the week with steep losses

Global equities were broadly lower again amid the continued global stock market correction that has come from the rapid spreading of the coronavirus outside the epicenter of China, with cases spiking in Italy, South Korea and Iran recently. The first case of the virus in the U.S. from an unknown origin has further exacerbated concerns, as past cases had a fairly direct link to China. The outbreak has weighed on economic and earnings forecasts and has seen China react with a flood of stimulus measures.

There are some expectations for potential coordination among global central banks, including the Fed, to stabilize the markets.

Global economic data has been totally overshadowed by the virus and has not had enough time to reflect the impact of the outbreak, but for the time being remains reasonably strong, highlighted today by an upbeat read on German unemployment and a slightly hotter-than-expected report on German consumer price inflation. Japan offered a stronger-than-expected read on the nation’s retail sales for last month.

The euro and British pound lost ground versus the U.S. dollar, while the safe-haven Japanese yen posted strong gains. Global bond yields were lower; however Italy and Greece saw another day of higher rates.

The U.K. FTSE 100 Index lost 3.2%, Germany’s DAX Index fell 3.9%, France’s CAC-40 Index dropped 3.4%, Spain’s IBEX 35 Index declined 2.9%, Switzerland’s Swiss Market Index was down 3.7%, and Italy’s FTSE MIB Index decreased 3.6%.

Japan’s Nikkei 225 Index tumbled 3.7%. China’s Shanghai Composite Index dropped 3.7% and the Hong Kong Hang Seng Index fell 2.4%. Australia’s S&P/ASX 200 Index and South Korea’s Kospi Index both traded 3.3% lower, while India’s S&P BSE Sensex 30 Index plunged 3.6%

Stocks register historic weekly drop

U.S. stocks, in concert with the global markets, plunged with the S&P 500 posting the worst week since the financial crisis and moving into correction territory—from an all-time high—in the shortest amount of time in history. Uncertainty ran wild regarding the supply and demand impact of China’s aggressive containment efforts in the epicenter that included shutting down entire regions of the country and some key manufacturing hubs. The lack of clarity regarding the impact was exacerbated by spikes in new cases in South Korea and Italy, as well as the first case in the U.S. of unknown origin.

All major market sectors plunged into correction territory, potentially amplified by the growing use of systematic trading strategies, and amid frantic reassessments of pre-outbreak earnings and economic modeling by economists and analysts who grappled with the heightened uncertainty of the economic impact and the recent flood of companies issuing warnings regarding the outbreak.

The week saw expectations jump regarding a potential monetary policy reaction from the Fed and potentially some sort of global central bank coordination. Treasury yields tumbled, posting a string of record lows, and crude oil prices registered the worst weekly drop in 11 years that took WTI crude oil below $45 per barrel for first time in more than a year.

Economic data was shoved to the back burner due to most figures being pre-outbreak (January) reads, such as a jump in new home sales to the highest level since mid-2007 and a much stronger-than-expected rebound in core durable goods orders.

As expected, even some relatively upbeat February reads on regional manufacturing and Friday’s upward revision to consumer sentiment for this month made little-to-no impact.

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Market Insights 2/27/2020

Stocks suffered another day of steep losses after coronavirus concerns were stoked by the first case in the U.S. from an unknown origin. Prior cases in the country had a fairly direct link to China, which remains the hardest hit country by the disease.

Treasury yields continued to fall and set new record lows on the longer end of the curve. Currency markets were in less of a risk off mood than other markets, as the U.S. dollar weakened versus most of its major peers and the dollar’s fellow safe-haven, the Japanese yen, found itself in the middle of the pack among major currencies.

Economic data was generally good today with durable goods orders declining less than expectations had called for and pending home sales rising faster than expected. Global markets were mostly lower.

The Markets…

The Dow Jones Industrial Average fell 1191 points (4.4%) to 25,767

The S&P 500 shed 138 points (4.4%) to 2,978

The NASDAQ was down 414 points (4.6%) to 8,566

In heavy volume, 1.8 billion shares were traded on the NYSE and 4.5 billion shares changed hands on the NASDAQ

WTI oil fell $1.64 to $47.09 per barrel and wholesale gasoline was down $0.04 to $1.41 per gallon

The Bloomberg gold spot price shed $0.60 to $1,642.50 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—fell 0.5% to 98.48

Q4 GDP unrevised, and jobless claims rise

Weekly initial jobless claims rose by 8,000 to 219,000, above estimates of 212,000, with the prior week’s figure being revised higher by 1,000 to 211,000. The four-week moving average ticked higher by 500 to 209,750, while continuing claims declined by 9,000 to 1,724,000, north of estimates of 1,711,000.

The second look (of three) at Q4 Gross Domestic Product, the broadest measure of economic output, showed a quarter-over-quarter annualized rate of growth of 2.1%, unrevised from the first release, matching forecasts and Q3′s unrevised pace. Personal consumption was revised to a 1.7% increase, in line with expectations, from the initially-reported 1.8% increase. Q3 consumption was unrevised at a 3.2% rise.

On inflation, the GDP Price Index was revised lower to a 1.3% increase, versus estimates calling for it to be unadjusted at a 1.4% gain, while the core PCE Index, which excludes food and energy, was revised downward to a 1.2% increase, compared to forecasts to match the prior reading’s 1.3% rise.

Treasuries were higher, with the yield on the 2-year note falling 9 basis points to 1.07%, the yield on the 10-year note ticking 7 bp lower to 1.27%, and the 30-year bond rate falling 6 bps to 1.77%. Bond yields have tumbled as the coronavirus concerns have fostered an intensified flight to safety in the markets.

Pending home sales gained 5.2% month-over-month in January, versus projections of a 3.0% gain, and following the downward-revised 4.3% drop registered in December. Sales were 6.7% higher y/y, compared to the expected 2.1% gain. Pending home sales reflect contract signings and are a gauge of the pipeline of existing home sales.

Global markets lower

International equities fell sharply, as the global markets remained rocked by the intensified concerns regarding the spreading of the coronavirus. Italy continued to be a key area of focus, with new cases spiking in the nation. The recent spread to South Korea has furthered supply shock worries. The reported case in the U.S. of unknown origin added another layer of uneasiness.

The Bank of Korea kept monetary policy unchanged, which came as a surprise to some that had expected a rate cut. Eurozone economic confidence for this month improved more than expected. The euro and Japanese yen rallied versus the U.S. dollar, while the British pound weakened slightly. Global bond yields were lower for the most part, but spreads on peripheral debt in Europe continued to widen with Greece, Italy, Portugal and Spain seeing a fairly dramatic rise in rates.

The U.K. FTSE 100 Index was down 3.5%, Germany’s DAX Index fell 3.3%, France’s CAC-40 Index dropped 3.2%, Spain’s IBEX 35 Index tumbled 3.6%, Switzerland’s Swiss Market Index decreased 2.9%, and Italy’s FTSE MIB Index declined 2.7%.

Japan’s Nikkei 225 Index fell 2.1%, with the yen gaining solid ground in the continued flight to safety, while South Korea’s Kospi Index dropped 1.1%. Australia’s S&P/ASX 200 Index traded 0.8% lower and India’s S&P BSE Sensex 30 Index declined 0.4%. However, China’s Shanghai Composite Index ticked 0.1% higher and the Hong Kong Hang Seng Index gained 0.3%.

Market Insights 2/24/2020

Equities around the world fell sharply today as more cases of the deadly coronavirus were announced in Italy, South Korea and Iran.

Treasuries and gold were much higher in the flight-to-safety. The U.S. dollar gained ground versus most of its major peers, but gains in the U.S. Dollar Index were contained by losses versus the greenback’s fellow safe-haven, the Japanese yen. Oil fell sharply with equities.

The Markets…

The Dow Jones Industrial Average tumbled 1,032 points (3.6%) to 27,961

The S&P 500 fell 107 points (3.2%) to 3,231

The NASDAQ dropped 355 points (3.7%) to 9,221

1.2 billion shares were traded on the NYSE and 3.1 billion shares changed hands on the NASDAQ

WTI oil shed $1.95 to $51.43 per barrel and wholesale gasoline was down $0.04 to $1.61 per gallon

The Bloomberg gold spot price added $27.80 to $1,676.60 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was slightly higher at 99.30

Yields fall as risk aversion persists, Texas manufacturing output modestly returns to growth

The February Dallas Fed Manufacturing Index moved back into expansion territory (a reading above zero), rising to 1.2 from -0.2 in January, above the Bloomberg expectation of 0.0. Production jumped, along with unfilled orders, but expansion in new orders decelerated and employment contracted slightly.

Treasuries gained solid ground, with the yield on the 2-year note falling 11 basis points to 1.25%, the yield on the 10-year note down 11 bps to 1.36% and the 30-year bond rate dropping 9 bps to 1.83%.

This week, along with the retail sector beginning to put the finishing touches on earnings season, the economic calendar will bring a host of data, but mostly pre-virus outbreak reads such as January new home sales, the first revision to Q4 GDP, January durable goods, and January personal income and spending.

Global markets selloff as well

European and Asian equities plunged alongside the U.S. after South Korea announced that it raised its alert to the highest level and while Iran and Italy have seen a noticeable increase in cases.

The euro nudged higher versus the U.S. dollar, the safe-haven Japanese yen gained ground on all its major peers, and the British pound traded lower in comparison to the U.S. dollar. Global bond yields were lower with the notable exception coming from Italy where the risk-off tenor of the day sent the 10-year yield nearly 6 basis point higher.

The concerns regarding the virus outbreak overshadowed a much stronger-than-expected read on German business sentiment for February, which showed the expectations component surprised noticeably to the upside.

The selloff was the worst in Europe. The U.K. FTSE 100 Index dropped 3.3%, France’s CAC-40 Index fell 3.9%, Spain’s IBEX 35 Index tumbled 4.1%, Germany’s DAX Index decreased 4.0%, Switzerland’s Swiss Market Index declined 3.6%, and Italy’s FTSE MIB Index plunged 5.4%. Stocks in Asia were also lower, led by a 3.9% drop for South Korea’s Kospi Index.

Markets in Japan were closed for a holiday. China’s Shanghai Composite Index declined 0.3% and the Hong Kong Hang Seng Index traded 1.8% lower. Australia’s S&P/ASX 200 Index fell 2.3% and India’s S&P BSE Sensex 30 Index declined 2.0%.

Market Insights 2/21/2020

U.S. equities finished solidly lower, posting the first weekly losses in three weeks, as angst over the continued uncertainty surrounding the impact of the coronavirus weighed on sentiment.

The uneasiness pressured Treasury yields, the U.S. dollar and crude oil prices, while gold prices rallied on the flight to safety.

Markets in Europe and Asia also finished lower.

The Markets…

The Dow Jones Industrial Average decreased 228 points (0.8%) to 28,992

The S&P 500 Index tumbled 35 points (1.1%) to 3,338

The Nasdaq Composite plunged 175 points (1.8%) to 9,577

In heavy volume, 1.1 billion shares were traded on the NYSE and 2.7 billion shares changed hands on the NASDAQ

WTI crude oil declined $0.50 to $53.38 per barrel and wholesale gasoline shed $0.02 to $1.76 per gallon

The Bloomberg gold spot price rallied $24.29 to $1,643.85 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—fell 0.5% to 99.33

Markets were lower for the week, as the DJIA declined 1.4%, the S&P 500 Index lost 1.2%, and the Nasdaq Composite fell 1.6%

Business activity reports show output slowed, existing home sales slip

The preliminary Markit U.S. Manufacturing PMI Index for February declined to 50.8 from January’s unrevised 51.9 figure, below the Bloomberg consensus estimate calling for a dip to 51.5. The preliminary Markit U.S. Services PMI Index showed output for the key U.S. sector fell into contraction territory this month, dropping to 49.4 from January’s 53.4 figure, where it was forecasted to remain. A reading of 50 for both indexes is the demarcation point between expansion and contraction.

Existing home sales declined 1.3% month-over-month in January to an annual rate of 5.46 million units, compared to expectations of 5.44 million units and December’s downwardly-revised 5.53 million rate. Sales of single-family homes and purchases of condominiums and co-ops both declined m/m but remained higher versus year ago levels. The median existing home price was up 6.8% from a year ago to $266,300, marking the 95th straight month of y/y gains. Unsold inventory came in at a 3.1-months pace at the current sales rate, up from the 3.0-months pace set the prior month.

National Association of Realtors Chief Economist Lawrence Yun said, “The trend line for housing starts is increasing and showing steady improvement, which should ultimately lead to more home sales,” adding that “Mortgage rates have helped with affordability, but it is supply conditions that are driving price growth.”

Treasuries jumped, as the yield on the 2-year note lost 3 basis points (bps) to 1.36%, while the yields on the 10-year note and the 30-year bond were down 5 bps to 1.47% and 1.92%, respectively. Bond yields remained under pressure and gold rallied as the uncertainty regarding the economic impact of the coronavirus outbreak continued to foster a flight to safety.

Europe and Asia lower on data and festering virus uncertainty

European equities finished lower, as the uncertainty regarding the impact of the coronavirus outbreak continued to hamper sentiment, while also applying pressure on global bond yields. The euro and British pound gained solid ground on the U.S. dollar, while bond yields were mostly lower.

The U.K. FTSE 100 Index and Switzerland’s Swiss Market Index were down 0.4%, France’s CAC-40 Index and Spain’s IBEX 35 Index lost 0.5%, Germany’s DAX Index declined 0.6%, and Italy’s FTSE MIB Index fell 1.2%.

Stocks in Asia finished mostly to the downside with the uncertainty regarding the impact of the coronavirus outbreak, which continues to grow outside the epicenter of China, remaining a drag on conviction, while some disappointing economic data out of Australia and Japan added to the negative tone.

Japan’s Nikkei 225 Index declined 0.4% and South Korea’s Kospi Index fell 1.5%, while Australia’s S&P/ASX 200 Index decreased 0.3%. The Hong Kong Hang Seng Index dropped 1.1%, but China’s Shanghai Composite Index advanced 0.3% amid reports of business activity resuming and in the wake of the recent flood of stimulus measures that the country has deployed to combat the impact of the virus.

Market Insights 2/20/2020

U.S. equities finished in the red, but well off the lows of the day after tumbling in midday action, as a risk-off tone occupied Wall Street amid continued uneasiness of the spreading of the coronavirus outside of the epicenter of China.

The moves came despite some relief early on that the Asian nation has been making moves in an attempt to stem the uneasiness surrounding the economic impact.

Leading Economic Indicators rebounded much more than expected and regional manufacturing output jumped to a three-year high.

Treasury yields finished lower and the U.S. dollar saw a modest increase, while gold rose in a flight to safety and crude oil prices gained ground.

The Markets…

The Dow Jones Industrial Average fell 128 points (0.4%) to 29,220

The S&P 500 Index lost 13 points (0.4%) to 3,373

The Nasdaq Composite was down 66 points (0.7%) to 9,751

In heavy volume, 926 million shares were traded on the NYSE and 2.7 billion shares changed hands on the NASDAQ

WTI crude oil rose $0.39 to $53.88 per barrel and wholesale gasoline was unchanged at $1.66 per gallon

The Bloomberg gold spot price was up $7.90 to $1,619.60 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.2% to 99.87

Leading Indicators rise more than expected, regional manufacturing jumps

The Conference Board’s Index of Leading Economic Indicators (LEI) for January was 0.8% higher month-over-month, compared to the Bloomberg projection of a 0.4% increase and December’s unrevised 0.3% decline. The index’s solid upward move was led by decisive positive contributions from jobless claims and building permits, while stock prices, credit conditions and consumer expectations also improved, more than offsetting the continued decline in ISM new orders.

Treasuries rose, as the yield on the 2-year note was down 3 basis points to 1.38%, while the yields on the 10-year note and 30-year bond declined 5 bps to 1.52% and 1.97%, respectively.

Weekly initial jobless claims rose by 4,000 to 210,000, matching estimates, with the prior week’s figure being revised higher by 1,000 to 206,000. The four-week moving average decreased by 3,250 to 209,000, while continuing claims rose by 25,000 to 1,726,000, north of estimates of 1,717,000.

Europe falls in final minutes of trading, Asia mixed on data and coronavirus response

European equities turned lower in the last minutes of trading on some risk-off sentiment amid continued fears surrounding the coronavirus and the spreading of such outside the epicenter of China, trumping some relief early on that appeared to come from further measures from China to stimulate the economy in the form of a lending rate cut.

The euro and the British pound were lower versus the U.S. dollar, and bond yields in the region were lower.

The U.K. FTSE 100 Index was down 0.3%, France’s CAC-40 Index lost 0.9%, Germany’s DAX Index fell 0.8%, Spain’s IBEX 35 Index declined 1.5%, Italy’s FTSE MIB Index decreased 1.6%, and Switzerland’s Swiss Market Index traded 1.0% lower.

Stocks in Asia finished mixed with the markets digesting recent upbeat global economic data, with yesterday’s strong U.S. housing data being followed by Australia’s employment change rising more than expected for last month and January Chinese lending statistics topping forecasts.

The markets continued to grapple with the outbreak of the coronavirus, though some of the worries have faded due to the stimulus and containment measures deployed by China.

The Shanghai Composite Index rallied 1.8% as the favorable lending data was met with another reduction of China’s loan prime rate (LPR). Japan’s Nikkei 225 Index gained 0.3%, with the yen losing some ground late in the session, and Australia’s S&P/ASX 200 Index also moved 0.3% higher. However, the Hong Kong Hang Seng Index declined 0.2%, South Korea’s Kospi Index fell 0.7% and India’s S&P BSE Sensex 30 Index decreased 0.4%.

Market Insights 2/19/2020

Equities around the world were higher today as worries over the coronavirus appeared to ease somewhat on the heels of a report that China’s state-owned enterprises are getting back on line and as the number of new cases fell for the second-straight day.

Treasury yields were slightly higher and the U.S. Dollar was higher versus most of its major peers.

Crude oil prices were solidly higher, which made energy the best performing sector on the day. Gold also gained ground.

The Markets…

The Dow Jones Industrial Average rose 116 points (0.4%) to 29,348

The S&P 500 added 17 points (0.5%) to 3,387

The NASDAQ was up 84 points (0.9%) to 9,817

829 million shares were traded on the NYSE and 2.4 billion shares changed hands on the NASDAQ

WTI oil rose $1.24 to $53.29 per barrel and wholesale gasoline was up $0.05 to $1.66 per gallon

The Bloomberg gold spot price was up $8.20 to $1,611.80 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.1% to 99.59

Housing construction activity and wholesale inflation top forecasts, Fed meeting details

Housing starts for January declined 3.6% month-over-month to an annual pace of 1,567,000 units, above the Bloomberg forecast of 1,428,000 units. December starts were revised higher to an annual pace of 1,626,000. Building permits, one of the leading indicators tracked by the Conference Board as it is a gauge of future construction, jumped 9.2% m/m to an annual rate of 1,551,000, north of expectations of 1,450,000 units.

The Producer Price Index (PPI) showed prices at the wholesale level in January rose 0.5% m/m, above forecasts calling for it to match December’s unrevised 0.1% gain. The core rate, which excludes food and energy, also gained 0.5% m/m, versus an expected 0.2% increase and December’s unadjusted 0.1% rise. Y/Y, the headline rate was 2.1% higher, above projections of a 1.6% increase and the prior month’s unadjusted 1.3% gain.

Minutes from the late-January meeting of the Fed were released this afternoon. The minutes showed committee “participants discussed how maintaining the current policy stance for a time could be helpful in supporting U.S. economic activity and employment in the face of global developments that have been weighing on spending decisions.”

Treasuries were slightly lower, with the yield on the 2-year note 1 bp higher to 1.42%, the yield on the 10-year note fractionally higher at 1.56% and the 30-year bond rate flat at 2.01%.

Global market join U.S. in rally

Global equities regained ground today as worries over the coronavirus appeared to ease somewhat on the heels of a report that China’s state-owned enterprises are getting back on line. The euro was little changed versus the U.S. dollar and most European yields fell on the day.

The U.K. FTSE 100 Index and Italy’s FTSE MIB Index were up 1.0%, France’s CAC-40 Index rose 0.9%, Spain’s IBEX 35 Index and Germany’s DAX Index gained 0.8%, and Switzerland’s Swiss Market Index advanced 1.1%.

China’s Shanghai Composite Index declined 0.3% but the Hong Kong Hang Seng Index gained 0.5%. Japan’s Nikkei 225 Index advanced 0.9%, South Korea’s Kospi Index ticked 0.1% higher, Australia’s S&P/ASX 200 Index increased 0.4% and India’s S&P BSE Sensex 30 Index gained 1.1%.

Market Insights 2/18/2020

U.S. equities finished mostly lower with the NASDAQ being the only major index in the green.

The tech-heavy index overcame weakness stemming from disappointing guidance from its largest constituent, Apple. The tech giant warned that supply chain disruptions from the coronavirus outbreak were constraining the supply of iPhones. Walmart posted Q4 results that topped expectations for earnings, but fell short on revenues.

Treasury yields were lower. Economic data provided a better-than-expected read on regional manufacturing and showed strong homebuilder sentiment.

The U.S. dollar was higher, along with gold on bids for safety. Crude oil prices fell and global equities finished mostly lower.

The Markets…

The Dow Jones Industrial Average was down 166 points (0.6%) to 29,232

The S&P 500 fell 11 points (0.3%) to 3,370

The NASDAQ was up 2 points to 9,733

916 million shares were traded on the NYSE and 2.2 billion shares changed hands on the NASDAQ

WTI oil was flat at $52.05 per barrel and wholesale gasoline added $0.03 to $1.61 per gallon

The Bloomberg gold spot price added $17.20 to $1,603.60 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.4% to 99.43

Regional manufacturing and housing data kick off the economic week

The Empire Manufacturing Index, a measure of activity in the New York region, moved further into a level depicting expansion (above zero) for February, rising to 12.9 from the 4.8 level posted in January, and north of the FactSet forecast of 5.0. New orders and shipments rose sharply and inventories increased significantly, though employment expanded only modestly.

Treasuries were higher, with the yield on the 2-year note declining 2 basis points (bps) to 1.41%, the yield on the 10-year note dropping 3 bps to 1.56%, and the 30-year bond rate falling 3 bps to 2.01%.

The National Association of Home Builders (NAHB) Housing Market Index showed homebuilder sentiment in February dipped to 74 from January’s unrevised 75 level, where it was expected to remain, with a level of 50 separating good and poor conditions.

Global equities mostly lower

Global equities finished mostly lower, with the uncertainty regarding the global impact of the coronavirus outbreak continuing to weigh on sentiment. The euro was lower versus the U.S. dollar, while the British pound and Japanese yen traded higher. Global bond yields were mostly lower, though some peripheral Eurozone countries saw higher rates.

As for the major global indexes: the U.K. FTSE 100 Index was down 0.7%, France’s CAC-40 Index decreased 0.5%, Germany’s DAX Index declined 0.8%, and Spain’s IBEX 35 Index and Switzerland’s Swiss Market Index dipped 0.2%, while Italy’s FTSE MIB Index was 0.4% higher.

Mainland Chinese stocks overcame an early decline and finished modestly higher with the Shanghai Composite Index posting a gain of 0.1%. Japan’s Nikkei 225 Index fell 1.4%. The Hong Kong Hang Seng Index dropped 1.5%. Australia’s S&P/ASX 200 Index dipped 0.2%. South Korea’s Kospi Index traded 1.5% lower and India’s S&P BSE Sensex 30 Index decreased 0.4%.

Some Facts on US President’s

In recognition of President’s Day, a look back at economic, earnings and stock market performances under U.S. presidents since WWII are in order.

The S&P 500’s 13.9% compound annual growth rate thus far in President Trump’s term in office is second only to Clinton’s 14.9% advance and slightly above Ford’s 13.4%, but well ahead of Nixon’s and Bush (43)’s 4.7% and 4.6% respective declines.

Despite this disparity of price growth, 10 of 13 presidents endured bear markets while in office, with Johnson and Truman the only ones to be in office at the start of two bear markets. Even though Ford, Obama and Trump sidestepped bear markets, they and nine others experienced corrections (10%-19.9% declines), with Clinton, Eisenhower, Ford, and Obama racking up three apiece. Only Kennedy had none.

Trump is again toward the top when looking at corporate profit growth. Obama presided over a 26.0% EPS CAGR during his eight years in office versus Trump’s current tally of 13.4%, with Clinton (+12.8%) and Truman (+12.6%) close behind, while Bush (41) and Bush (43) endured the only negative readings.

From a Real GDP growth perspective, Trump is ranked 8th of 13 with a CAGR of only 2.5%, well below the 5%+ advances for Kennedy, Johnson, and Truman, but above the sub-2% gains for Bush (43) and Obama.

Despite this relative weakness in GDP growth, Trump is on track to be the only Republican president not to have a recession start in their first term in office since Teddy Roosevelt in 1901.

As a result, Trump may join Democrats Clinton, Johnson, Kennedy, and Obama as Presidents who had no recessions start while in office, while Truman, Nixon and Bush (43) had two and Eisenhower had three.