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Market Report 19th March 2020

Market Report 19th March 2020 981 980 Realm
Stocks fell again on Wednesday but U.S. futures rallied back overnight. 
  • European stocks fell sharply again as mounting fears about an imminent recession outweighed stimulus announcements from governments and sent stock prices lower.
  • US stocks moved sharply lower during trading extending the selloff seen over the past several sessions.
  • Asian stocks ended deep in the red as investors grappled with the possibility of a virus-induced global recession. The global economy is set to see a recession this year due to the severe economic shock caused by the coronavirus.

Global Macro

  • Japan’s consumer price inflation unexpectedly fell to 0.4% yoy in February 2020 from 0.7% in the previous month, missing market consensus of 0.8%. This was the lowest inflation rate since last October, as prices went up less for furniture & household utensils (2.1% vs 2.7% in January), culture & recreation (1.1% vs 2.1%), medical care (0.7% vs 0.8%), and transport & communication (1.4% vs 1.7%). Annual core inflation rate, which excludes fresh food, fell to 0.6% from 0.8% remaining well below the Bank of Japan’s 2% target.  
  • Investors wonder what additional measures the ECB could implement to support the bloc should the coronavirus crisis deepen, after policymaker Robert Holzmann suggested in an interview that monetary policy was at its limits and the central could not deliver on market expectations. The ECB has released a statement in response to these claims in a bid to calm investors’ nerves, saying it is ready to take further measures to protect the economy.
  • Housing starts in the US went down 1.5% month-over-month to an annualized rate of 1.599 million in February of 2020. It compares with market expectations of 1.5 million. Starts for the volatile multi-family segment slumped 17% to 0.508 million while single-family housing which is the largest share of the housing market, went up 6.7% to 1.072 million. Sales went down in the West (-18.2% to 374 thousand) and the Northeast (-41.4% to 126 thousand) but rose in the South (15.2% to 889 thousand) and the Midwest (16.7% to 210 thousand). Year-on-year, housing starts surged 39.2%. Data for January was revised higher to 1.624 million from an initial 1.567 million.

Disclaimer:  ‘Where the business has 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.