Overview: Stock markets rebounded last week as investors continue to weigh economic fundamentals and positive earnings while monitoring the latest headline news on the coronavirus. Market sentiment has remained positive as investors appear to believe the coronavirus effect on the global economy to be short-lived and growth to rebound soon. Here in the U.S., the S&P 500 Index closed the week up 1.6% and is now up around 4.8% for the year. International developed stocks are roughly unchanged year-to-date, and emerging market stocks have recovered from the lows, up over 4% on the month. Interest rates were stable, with the 10-year Treasury finishing the week at 1.59%. Bond returns have benefited from the decline in yields so far in 2020, with the Barclays Aggregate (taxable) and Municipal Indices both up about 1.8% in total return for the year-to-date.
The Week Ahead: With the financial markets closed on Monday for President’s Day, trading will begin on Tuesday with investors evaluating the final stretch of earnings for the fourth quarter of 2019, along with economic data on PPI, housing starts, and purchasing managers data. Corporate earnings have generally been reported above expectations. According to FactSet, 77% of the companies in the S&P 500 Index have now reported last quarter earnings. 71% percent of these companies have reported a positive earnings per share (EPS) surprise and 67% of S&P 500 companies have reported a positive revenue surprise.
Sources: Goldman Sachs Asset Management, FactSet
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