Overview: Global stock markets plunged as coronavirus continued to dominate headlines. The correction last week was the largest market decline since the global financial crisis for major stock markets. The S&P 500 dropped over 11% for the week, and international developed and emerging market stocks were down 9.6% and 7.2% respectively. Interest rates dropped sharply in the flight-to-safety trade, with the 10-year Treasury reaching an all-time low, ending the week at 1.14%. Markets are now pricing in a virtual certainty of a 50 basis point (0.5%) rate cut in the upcoming March Federal Reserve meeting. Against the backdrop of negative news, economic data has been encouraging. New homes sales reported last week were the highest since 2007, and data showed strong personal income and consumer spending growth. This week the highlight will be Friday’s jobs report, (expectation of 175,000 new jobs created), with the unemployment rate to remain near a 50-year low at 3.6%.
Sources: Goldman Sachs Asset Management, CME FedWatch
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