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Market Report 27th February 2020

Market Report 27th February 2020 981 980 Realm

Most markets ended lower, weighed down by investor concerns about a potential coronavirus pandemic.

  • European stocks turned in a mixed performance on Wednesday with investors largely staying cautious amid continued worries about the economic impact of the novel coronavirus that has reportedly spread to several parts of the globe.
  • US stocks once again failed to sustain an early move to the upside and succumbed to selling pressure over the course of the trading session on Wednesday. The major averages pulled back well off their early highs and into negative territory.
  • Asian stocks extending recent losses amid continued fears that the coronavirus outbreak could escalate into a pandemic. The flu-like virus has now spread to several countries in Europe and the Middle East, with Switzerland, Austria and Romania reporting their first infections on Tuesday.

Global Macro

  • Hong Kong’s GDP shrank 0.3% quarter-on-quarter in the three months to December 2019, less than earlier estimates of a 0.4% contraction and after a 3.0% slump in the previous period, final estimates showed. It was the third-straight quarterly decline, keeping the economy in a technical recession. Final estimates showed exports rebounded 1.9% (vs 1.2% in Q3) while imports went down 0.5% (vs -2.0% in Q3). Also, both private consumption (0.5% vs -4.1%) and government expenditure (1.6% vs 2.6%) rose. Year-on-year, the GDP contracted 2.9%, the second straight decline. For 2019 as a whole, the GDP contracted 1.2%, the first annual decline since 2009, and after a 2.9% advance in 2018.
  • France’s consumer confidence indicator was at 104 in February 2020, unchanged from the previous month and above market expectations of 103. Households’ opinion balance on their future financial situation lost two points to -5; and that related to their expected saving capacity increased by one point to 0. Furthermore, the share of households considering it is a suitable time to make major purchases slightly decreased to -8.
  • Vehicles sales in China dropped 18.7% from a year ago to 1.9 million units in January 2020, worse than market forecasts of an 18% fall, and marking the 19th consecutive month of decline amid Lunar New Year holidays and the coronavirus outbreak. Sales of new energy vehicles (NEVs), including plug-in hybrids, battery-only electric vehicles and those powered by hydrogen fuel cells, went down 51.6%, the seventh straight decrease.  

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.