Global Markets Update Monday, 30 March 2020
30 Mar 2020
Global stockmarkets rallied over the week, reassured by central bank pledges to do whatever it takes to help economies and by massive fiscal stimulus measures from governments. While Europe, particularly Italy, Spain and France, continued to see large numbers of daily fatalities, the epicentre of the virus crept west, with the US recording more than 100,000 confirmed cases.
Bargain hunters were also in evidence as the S&P 500’s earnings yield minus the 10-year Treasury yield rose to its highest level since the eurozone debt crisis of 2012. However, a growing number of companies are cutting or cancelling their dividends and/or share buybacks to help protect their balance sheets against coronavirus disruption. In the UK, dividends have dropped by the largest amount since the 2008 financial crisis, while payouts from US companies are set to drop for the first time since 2009.
Global Markets Update Monday, 23 March 2020
23 Mar 2020
Global stockmarkets remained volatile, although the extraordinary supportive fiscal measures implemented by governments appeared to have halted the decline – at least temporarily. With most of Europe in lockdown, as well as one in five US citizens, Asia provided a rare ray of hope as China announced no new cases of COVID-19 for three days in a row. However, news of new clusters in South Korea unsettled investors.
Global Markets Update Monday, 16 March 2020
16 Mar 2020
The World Health Organization declared the coronavirus outbreak a pandemic, saying that Europe was now the “epicentre” of the crisis. While cases surged in Europe, the number of reported cases in China continued to drop, with more cases being imported from arrivals from outside of China compared to transmission within China.
Global stockmarkets plunged, with most markets entering an official bear market (defined as a decline of at least 20% from a recent peak) after President Trump banned visitors from most European countries to the US. US and UK stock suffered their steepest daily falls since “Black Monday” in 1987, while European stocks saw the largest daily falls on record. Continued sharp falls in the oil price also added to global stocks’ woes. Unusually government bonds failed to provide a safe haven as stock markets tumbled, with yields rising over the week.
Global Markets Update Monday, 9 March 2020
09 Mar 2020
Global stocks started a volatile week strongly but suffered steep declines towards the end of the week amid growing fears that the coronavirus outbreak would lead to a global recession. Central banks across the world reduced interest rates, led by the Federal Reserve, and governments announced measures to help counter the impact of the coronavirus outbreak. Policymakers from the G7 countries also pledged action.
Makers of household staples, disinfectants and video games have all bucked the sell off as people prepare for possible self-isolation.
Global Markets Update Monday, 2 March 2020
02 Mar 2020
Global stocks plunged, suffering their worst one-day sell-off in two years, on news of several significant coronavirus outbreaks outside of China. The sharp rise in cases in Iran and Italy, as well as the existing outbreak in South Korea, meant that for the first time more new cases were reported outside of China than within China. Most markets are now in a technical correction, having fallen at least 10% from their recent peaks in January. Indeed, the FTSE All-World lost almost 13% over the week, wiping out six months of gains and lopping nearly $6tn off the value of global equities.
Airlines and travel firms were among the worst performers, and financial stocks were also hit badly by a sharp drop in longer term bond yields.
Global Markets Update Monday, 24 February 2020
24 Feb 2020
Global stocks retreated as the coronavirus continued to spread beyond China and evidence started to emerge of its impact on company profits: airlines warning they stand to lose $29.3bn of revenue this year due to the coronavirus outbreak, car manufacturers facing closure due to parts shortages and tech companies also worried about the impact on their supply chains.
Global Markets Update Monday, 17 February 2020
17 Feb 2020
Global stocks rose modestly amid hopes that the coronavirus outbreak would be relatively mild in the US and Europe.
The US administration announced it would raise tariffs on plane imports from 10-15%, but decided against raising the 25% levies it has also put in place on a wide range of European and British goods, ranging from food to tools and apparel.
Global Markets Update Monday, 10 February 2020
10 Feb 2020
Global equities ended January on a weak note as the coronavirus outbreak spread, causing countries to shut borders and impose quarantine restrictions on visitors arriving from mainland China. However, stocks bounced in early February on news that China was to halve tariffs on some US imports. Measures taken by the People’s Bank of China to help the economy combat the fallout from the virus also helped boost risk sentiment.
The extended shutdown of Chinese factories started to impact the global supply chain. Toyota, Hyundai, Volvo and PSA, the owner of Peugeot, warned that coronavirus is disrupting their supply chains, while Fiat Chrysler warned that one of its European plants will be forced to halt production in a matter of weeks. Disruption was also expected to the global technology supply chain.
Global Markets Update Monday 27 January 2020
27 Jan 2020
Global stocks retreated as confirmed cases of the coronavirus surged and the outbreak spread outside China. At the start of the Lunar New Year period, which normally sees millions of people travelling to visit families, several Chinese cities have imposed significant travel restrictions, while Wuhan, the source of the outbreak, is in effective lockdown.
The US threatened to impose tariffs on UK car exports if the UK pushes ahead with plans for a digital services tax in April – during the week, France offered to defer its plans for digital tax. The EU and US also clashed over EU proposals for a carbon tax.
Global Markets Update Monday, 20 January 2020
21 Jan 2020
Global stocks rallied, the MSCI World Index hitting a new peak, with sentiment lifted by news that the US and China had signed a “phase one” trade deal. In the agreement, China has pledged to boost US imports by $200bn above 2017 levels and strengthen intellectual property rules, while the US has agreed to halve some of the new tariffs it has imposed on Chinese products. While the Trump administration also removed its designation of China as a “currency manipulator”, the majority of US tariffs on Chinese goods remain in place.