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Market Report 17th February 2020

Market Report 17th February 2020 981 980 Realm

Monday morning: equities are higher this morning following new stimulus from the Chinese central bank to support the economy.

Friday 14th:

  • European stocks turned in a mixed performance on Friday with investors largely making cautious moves, reacting to quarterly earnings announcements and news about the virus outbreak in China and its likely impact on the global economy.
  • US stocks Following the volatility seen over the course of the previous session, stocks continue to experience choppy trading on Friday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing
  • Asian stocks ended mixed on Friday after an early-sell off, as the death toll from China’s virus epidemic neared 1,400, raising fears of more global contagion.

Global Macro

  • Minutes from the Federal Reserve, ECB, RBA and RBI will be in focus this week, while central banks in China, Turkey and Indonesia will be deciding on interest rates. On the economic data front, flash PMI surveys for the US, UK, Eurozone, Japan and Australia could provide an insight into the early impact of the coronavirus outbreak on the global economy. Other figures to follow include US housing data; UK jobs report, inflation and retail trade data; Japan Q4 GDP and trade balance; and Australia employment numbers. 
  • Germany’s gross domestic product unexpectedly showed no growth in Q4 2019, after an upwardly revised 0.2% growth in Q3 and missing market expectations of a 0.1% advance, a preliminary estimate showed. Both household consumption and government spending slowed markedly, while investment in machinery and equipment was down. Meanwhile, exports fell slightly, while imports rose, suggesting that net trade had a negative impact on the economy. Year-on-year, the economy expanded by a calendar-adjusted 0.4% in Q4, following an upwardly revised 0.6% growth in Q3 and matching forecasts. On an unadjusted basis, the economy expanded 0.3%, slowing from an upwardly revised 1.1% expansion in Q3.  
  • The Eurozone quarterly economic growth was confirmed at 0.1% in the fourth quarter of 2019, down from 0.3% in the previous three-month period, a second estimate showed. That was the weakest pace of expansion since a contraction was recorded in the first quarter of 2013. Among the bloc’s largest economies, German GDP stalled, while France and Italy fell into contraction territory. On the other hand, Spain’s economy expanded at a slightly faster pace.
  • The Japanese economy shrank 1.6% qoq in Q4 2019, compared to market consensus of a 0.9% contraction and after a downwardly revised 0.1% growth in Q3, a preliminary estimate showed. This was the first contraction since Q3 2018 and the steepest since Q2 2014, as private consumption fell for the first time in five quarters following October’s sales tax hike and business spending dropped for the first time in 3 quarters.

Disclaimer:  ‘Where the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy. This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.