Market Report 6th March 2020

Market Report 6th March 2020 981 980 Realm
Stocks sell-off on Thursday and lower this morning. 
  • European stocks tumbled on Thursday amid renewed worries about the impact of the rapidly spreading coronavirus outbreak on the global economy.
  • US stocks: Extending the volatility seen over the past several sessions, stocks moved sharply lower during trading on Thursday following the rally seen on Wednesday. The major averages more than offset yesterday’s gains but remain well off last Friday’s lows.

Global Macro

  • New orders for US-manufactured goods shrank 0.5 % from a month earlier in January of 2020, following an upwardly revised 1.9 % rise in December and worse than market expectations of a 0.1 % fall. New orders for ships and boats (-80.9 %) and defense communications equipment (-31.7 %) recorded the biggest drops while nondefense aircraft and parts (346.2 %) jumped. Excluding transportation, factory orders edged down 0.1 % while orders for non-defense capital goods excluding aircraft, seen as a proxy for business spending plans on equipment, rose 1.1 %.
  • Labor productivity in the US non-farm business sector increased by an annualized 1.2 % during the fourth quarter of 2019, compared to a preliminary estimate of 1.4 % and following a revised 0.3 % drop in the previous three-month period. Output increased 2.4 % (vs 2.3 % in Q3) and hours worked rose 1.2 % (vs 2.7 % in Q3). Still, manufacturing sector labor productivity dropped 0.8 %, the third consecutive quarter of decline, as output contracted 0.4 % (vs 0.9 % in Q3) while hours worked were up 0.4 % (vs 1.4 % in Q3). Considering 2019 full year, productivity grew 1.9 %, the most since 2010.
  • Job cuts announced by US-based employers fell to 56.66 thousand in February of 2020, down by 16.4 % from January and by 26.3 % from the same month last year. Technology (10,218), leads all industries in announced job cuts, followed by retail (8,096), transportation (6,703) and telecommunications (5,670). Considering the first two months of 2020, US companies announced plans to cut 124,395 jobs, down from 129,823 a year earlier. Despite widespread concerns about the coronavirus, it has yet to impact job cut announcements. 
  • Japan’s household spending declined 3.9 % from a year earlier in January 2020, following a 4.8 % decline in the previous month and compared to a 4 % drop expected by consensus. The first decline in the year follows three annual declines in spending in 2019, as consumers continued to cut purchases after a sales tax hike in October, a typhoon that disrupted business, and the novel coronavirus outbreak.

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