Market Update 1/28/2020

Treasury prices rose significantly over the course of the week on a continuing outbreak of the corona virus and Eurozone economic news. On Tuesday, the first case of the coronavirus was diagnosed in the U.S. after it broke out in China earlier in the month, with at least 80 deaths attributable to the health issue. On Wednesday and Thursday, China had a strong response to the outbreak, shutting down some public transportation and later locking down the city of origin and two neighboring cities. On Friday, several more cases were reported in the U.S., along with other countries in Europe and Asia, leaving people to worry about a SARS-like outbreak that killed more than 800 people in Asia in 2003. This led investors to seek the perceived safety of Treasuries. The European Central Bank announced on Thursday that the benchmark deposit rate would remain at negative 0.5% and on Friday Manufacturing PMI beat expectations, leaving investors less concerned about the Eurozone.

The widening outbreak of the corona virus rattled investors, leading to the biggest weekly decline in the S&P 500 since August. The virus has led to 80 deaths in China and five cases have been reported in the U.S. Investors worry a breakout like the SARS virus could lead to a global slowdown. With earnings season in full swing for financials, American Express Co. guided above most analysts’ estimates after increasing benefits on some cards and predicting “more rational” value propositions from key competitors. By contrast, Discover Financial Services tumbled after announcing a large increase in spending in the coming year on marketing and technology to mitigate loan losses. Citizens Financial Group moved lower amid a mixed quarter as net interest income remained relatively flat on lower interest rates. In other earnings announcements, shares of Intel Corp. were a bright spot on robust growth from PC and data center processors. International Business Machines Corp. gained after reporting an increase in quarterly sales, snapping a long streak of shrinking revenues. Looking ahead to next week, investors will be watching the spread of the coronavirus and a number of key earnings announcements including Apple Inc., Starbucks Corp. and 3M Co. Economic news will also be center stage with the first reading of fourth-quarter GDP and the Fed’s January meeting.

Charles and Brian


Securities and Advisory Services offered through Client One Securities, LLC Member FINRA/SIPC and an investment advisor. Sawyer Wealth Management and Client One Securities, LLC are not affiliated.

The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.

Securities and Advisory Services offered through Client One Securities, LLC Member FINRA/SIPC and an investment advisor. Sawyer Wealth Management and Client One Securities, LLC are not affiliated.
The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.