Economically stimulative actions in China combined with reports of progress on a coronavirus vaccine and healthy US economic data to ease investor fears last week, leading US Equity Markets to all-time highs again. The S&P 500 rallied sharply for the week, up 3.2%, moving back into positive territory with year-to-date gains of 3.0%. The Nasdaq catapulted 4.0% for the week to bring its gains for the year up to 6.1%, while the Russell 2000 (small-cap stocks) increased 2.7% for the week but still remains down -0.7% for the year.
Global equity markets increased, though less than the US, as Chinese markets re-opened to notable losses following the Lunar New Year holiday and coronavirus delays. Developed Markets rose 1.8% for the week, as European markets outperformed Asian markets. For the year, Developed Markets are down -0.2%. Emerging Markets bounced back 2.8% last week, though they remain down -2.1% for the year.
US Economic Data continue to support a strong US consumer. Payroll gains for January came in at 225K, well ahead of expectations, while Payroll gains for both November and December were revised higher. The Unemployment Rate remains near decade-lows at 3.6%, and average annualized wage gains improved to 3.1%. The data suggest that conditions for the US consumer remain very healthy, which should be supportive of a healthy US economy.
Of Interest to Us
After five months in "contractionary" territory, US manufacturing activity moved back into "expansionary" territory for the month of January. Specifically, the ISM Manufacturing Index, a key gauge of US manufacturing, rose to 50.6 in the month of January, driven by a jump in new orders, production, and new export orders. Any reading above 50 is considered "expansionary." We are mindful that impacts from the coronavirus could cause US manufacturing to dip back into "contractionary" territory, but are encouraged at the improvement in what has been the weak link in the US economy.
for the week ending 2/7/2020
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