The Global Update

February 3

• The broader stock market recovered from their steep sell-off last Friday but coronavirus fears linger across the market.
• China took measures to reduce the impact of the epidemic on its economy, lowering reverse repo rates by 10 basis points.
• China also made a liquidity injection worth $171 billion (1.2 trillion yuan) to limit the negative economic impact of business and travel shutdowns.
• The ISM manufacturing index showed improvement and strength coming in at 50.9, beating consensus expectations of 48.7.
• The PMI manufacturing index at 51.9 showed a boost in production and employment. New orders were expected to be flat, consensus falling to 51.7. The actual numbers beat consensus slightly.
• Construction spending is down -0.2%, missing growth expectations of 0.5%. However, year-over-year from the current reporting date shows a growth of 5.0%.

February 4

• The broader market momentum picked up after a day of recovery in yesterday’s session.
• Speculation that the global economy may be resilient in the face of coronavirus due to current accommodative monetary measures may have boosted market sentiment.
• China released reports indicating that their global manufacturing is steady as their central bank injects liquidity into their banking system.
• December factory orders in the US came in higher at 1.8% (beating economist expectations of 1.3%) but this growth was skewed by orders for defense aircraft. Orders for all other core capital goods fell.

February 5

• A dramatic move in the Dow, S&P 500, and Nasdaq Composite today–all indices had a massive surge, entering record-high territory, erasing losses due to coronavirus fears.
• Much of the optimism was due in part to news that a coronavirus treatment may be on the horizon.
• However, the Word Health Organization played down this report, stating that no such therapeutic currently exists.
• The ADP employment change report showed 291,000 private-sector jobs were created in January–the largest gain in four years. This figure beat economist forecasts of a gain of 154,000.
• The US international trade deficit widened slightly in December to -$48.9 billion as compared when -$48.2 billion was expected.
• January’s Institute for Supply Management non-manufacturing index showed steady growth at 55.5, beating analyst forecasts of 55.2.

February 6

• Stocks hit record highs before pulling back as China announced that it would halve its tariffs on $75 billion worth of US products.
• Strong Q4 corporate earnings also gave indexes a major boost.
• Jobless claims in the week ended February 1 edged lower to 202,000 when 215,000 claims were expected.
• U.S. nonfarm productivity rose 1.4%, slightly under consensus expectations of 1.5%.

February 7 (intraday)

• Writing intraday, the Dow just dropped 150 points on fears that the coronavirus epidemic may dramatically slow the Chinese economy.
• Investors are beginning to sell despite stronger-than-expected US jobs data.
• While economists expected steady growth in January non-farm payrolls to the tune of 160,000, instead they got a surprise figure of 225,000. Nevertheless, coronavirus fears dampened optimism that might have boosted markets on the jobs numbers (at least temporarily).

February 10

• There were no scheduled economic releases today.
• Stock indexes edged lower as traders assess the potential economic implications of the coronavirus outbreak.
• Later today, the White House will release its economic projections, including an updated growth forecast, along with a proposed budget for the fiscal year.

February 11

• The broader market rose due to reports of a slowdown in the number of new coronavirus cases in China. S&P 500 and NASDAQ futures reached record highs.
• The National Federation of Independent Business small business optimism index was 104.3 when 103.2 was expected.
• The December Job Openings and Labor Turnover Survey (JOLTS) came in at 6.423 million, lower than consensus expectations of 6.775 million.

February 12

• Stocks rose to all-time highs, with the Dow jumping 250 points to a hit a record, as investors shook off concerns over how the coronavirus would impact corporate profits and the global economy.
• Federal Chief Jerome Powell returns to Capitol Hill this morning for a second day of testimony on the economy, monetary policy and financial regulation.

February 13

• Stocks plunged from their record highs as the markets grapple with a a jump in reported coronavirus cases and the virus’ possible economic impact.
• The U.S. consumer price index increased 0.1% last month, when a gain of 0.2% was expected and the consumer price index, excluding the often volatile food and energy categories, was up 0.2% as anticipated.
• Initial jobless claims increased 2,000 in the week ended February 8 to 205,000. Economists expected 210,000 new jobless claims.
• The number of Americans applying for first-time unemployment benefits advanced slightly last week, but remained at historically low levels.

February 14 (intraday)

• Mid-day, very little has changed in the markets as investors weigh strong corporate earnings against some not-so-good consumer data.
• Retail sales excluding autos, gas, building materials and food showed 0.3%, in line with consensus, and unchanged from last month. However, clothing stores experienced their biggest one-month drop since 2009.
• Industrial production also came in line with consensus at -0.3%.
• Consumer sentiment came in positive at 100.9, beating economist expectations of 99.7.
• Around 77% of all S&P 500 companies that have reported earnings–and so far, 72% of them have beat analyst expectations, according to FactSet data.

February 18

• The Dow Jones fell for a third consecutive day as investors remain focused on the coronavirus breakout.
• The Empire State Manufacturing Survey, which is compiled by the Federal Reserve Bank of New York, showed business grew in New York in February.
• The Empire State manufacturing index hit its highest level in nine months at 12.9 when 4 was expected.

February 19

• The S&P 500 and Nasdaq Composite rose to record highs as the tech sector outperformed while investors continued to weigh the coronavirus’ impact on the global economy.
• The producer price index, which is a measure of the prices businesses receive for their goods and services, was up a seasonally adjusted 0.5% in January from a month earlier.
• Economists had expected prices to rise 0.1%.
• The producer price index, excluding the often-volatile food and energy categories, was also up 0.5% when a gain .0.1% was anticipated.
• Housing starts in January were 1.567 million when economists estimated 1.420 million.
• Building permits for new construction hit a 13-year high to of 1.551 million when economists estimated 1.453 million permits

February 20

• Indexes fell with most of the losses coming from a sudden midday move.
• Traders could not pinpoint a catalyst for the sudden decline. However, some highlighted technical factors breaking down along with an increased risk-off sentiment stemming from fears of the coronavirus slowing the global economy.
• Initial jobless claims increased 4,000 in the week ended February 15 to a seasonally adjusted 210,000. This matched the forecast of economists.
• The economic activity in the manufacturing sector of the Philadelphia area expanded at a strong rate in February.
• The Philadelphia Federal Reserve manufacturing index jumped to 36.7 when 12.0 was anticipated. This reading is the highest since February 2017.

February 21

• The Dow dropped 250 points overnight as the number of new coronavirus cases escalated, fueling worries over a pronounced global economic slowdown.