Week of February 10th, 2020
- In China, the CSI 300 and Shanghai Composite Indexes rose moderately, while Japan’s Nikkei 225 closed slightly down.
- Due to new measurement techniques, China announced over 14,800 additional cases of COVID-19, though the rate of spread appeared to be decreasing.
- China-U.S. relations faltered again after last week’s positive trade news, with announcements that the U.S. Justice Department was bringing new charges against Chinese tech giant Huawei.
- European stocks rose cautiously, with the STOXX Europe 600 closing 1.43% up, and the FTSE largely unchanged.
- U.K. Chancellor Sajid Javid abruptly resigned from Prime Minister Boris Johnson’s cabinet following a disagreement over advisor choice. Javid will be replaced by Rishi Sunak, who may take a more relaxed approach to budgetary restraint.
- Despite its best efforts to woo investors on Friday, Royal Bank of Scotland’s stock dipped over 4%. The bank announced plans to rebrand as NatWest Group, to increase its dividend, and to decrease the negative climate impact of its financing. Nonetheless, concerns about its long-term profitability persisted.
- Bank of England Governor Mark Carney posited a positive approach to Brexit in an interview with Reuters, stating that Britain was working well to address its key problem of low productivity.
- U.S. equity benchmarks moved upwards on Friday, with the Dow and S&P gaining over 1%, and the Nasdaq gaining over 2%. In a continuation from last week, investors seemed to be seeing a brighter outlook with news of COVID-19 containment.
- U.S. Federal Reserve Chairman Jerome Powell testified before the Senate Banking Committee that the Fed was closely monitoring the spread of the coronavirus, comforting investors.
- The U.S. government reported that retail sales rose 0.3% in January, while industrial production fell by that same amount.
- The Mexican peso added 0.2% after the central bank cut interest rates yet again.
- Despite the seemingly increased optimism over COVID-19 in equities, U.S. 30-year Treasuries remained popular, with yields reaching a record low.
- Bitcoin has climbed back above $10,000, from a 2019 high of $4,000.
- The Brazilian real rose 1.26% on Friday, marking its biggest daily gain in two months, as the central bank moved to prevent a currency selloff.
The views expressed by the author may not reflect the opinions of The St Andrews Economist