The S&P 500 disappointed investors with its performance during the final week of January, on elevated concerns over the Coronavirus.
Due to the slowdown in the spread of the virus, the steady stream of better-than-expected Q4 2019 EPS reports, and a steep decline in the percentage of S&P 1500 sub-industries trading above their 10-week (50-day) moving averages, equity markets surged in four of five days last week, leaving the S&P Global 1200 higher by 2.7%, while U.S. large-, mid- and small-cap benchmarks gained from 2.1% to 3.2%.
What’s more, 10 of 11 S&P 1500 sectors rose in price. Only the utilities sector slipped after its P/E ratio traded at a more than 40% premium to its average since 1995.
Digging a little bit deeper, we see that 90% of the 148 sub-industries also advanced on the week, implying that concern over the economic damage from the virus will likely lessen in the week ahead.