MARKET WATCH: Feb. 21, 2020
Big Picture
Coronavirus Concerns Keeping Markets on Edge
Investors remain focused on the spread of the coronavirus and China’s efforts to contain the disease–and its effect on global supply chains. While U.S. and Canadian markets were closed Monday, news about the virus continued to move markets abroad. On Tuesday global equity markets slid after Apple Inc. said it was unlikely to meet its sales guidance because of the outbreak in China, underscoring the epidemic’s threat to global growth and corporate profits. Gold climbed more than 1% in the day’s trading as investors flocked to safe-haven assets. In Canada, data released Tuesday showed factory sales decreased for the fourth straight month in December, perhaps paving the way for eventual easing from the Bank of Canada.
Optimism took hold of markets on Wednesday after China reported another decline in new coronavirus cases–and vowed its support for additional stimulus to counter a slowdown in growth. Adding to the upbeat mood was the Fed’s optimistic assessment of the U.S. economy offered in the minutes from its January meeting. In response, the greenback climbed to almost a three-year high, while the safe-haven yen sank to a nine-month low. In Canada, the annual pace of inflation jumped to 2.4% last month, its fastest rate in almost two years, largely fueled by rising gas prices. By Wednesday’s close, the Dow had gained 116 points, the Nasdaq was up 84, while the TSX jumped 67.