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.
However, mounting gloom over the epidemic and its effects once again took hold of markets on Thursday. Although Q4 earnings for companies have generally exceeded or met expectations, forecasts for 2020 are being negatively impacted by the ongoing outbreak. Gold and bond prices rose as investors once again flocked to safe-haven assets. In the U.S., Labor Department data released Thursday showed the number of Americans applying for first-time unemployment benefits rose slightly last week but remains at an historically low level. By Thursday’s close, the Dow was off 128 points, paring declines of more than 300 points in earlier trading.
source https://richarddri.ca/coronavirus-concerns-keeping-markets-on-edge/
Dri Financial Group 