Stock markets rallied last week, with strong corporate earnings and tariff reductions by China counteracting ongoing coronavirus fears. The S&P 500 Index led the way, up 3.2% for the week. Both international developed and emerging market stocks ended the week in positive territory as well. After an extended lunar new year holiday, China stocks reopened last Monday. The CSI 300 index (Shanghai) opened initially down -7.9%, but recovered to finish down -2.8% for the week. Interest rates have trended lower this year on the flight-to-safety trade. The 10-year Treasury finished the week at 1.58%, lower in yield by about 0.35% for the year-to-date.
About two thirds of the companies in the S&P 500 Index have reported fourth quarter earnings, and results have generally exceeded expectations. In economic data, the U.S. jobs report was strong, with January nonfarm payrolls increasing by 225,000. Average hourly earnings grew by 3.1%, reflecting continued strength in the labor markets. Looking ahead, we expect elevated volatility to continue, as markets respond to the latest news on earnings, the economy, and ongoing news on the coronavirus.
Weekly Returns and Data
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