March 1, 2020
Weekly Market Outlook
By Keith Schneider
The Corona virus continues to spread, and equity markets tanked globally. US equity markets were down -11% on average and there was not one foreign stock market positive for the week. This is one of the worst weekly selloffs ever, and the fastest correction from new all-time highs on record.
US long bonds was one of the few bright spots and markets are now pricing several rates cuts this year with one coming this month. Economic data was tepid at best and most major financial institutions are bracing for further weakness. The panic set off margin calls and even gold, which was performing well, got hit by the need for cash. The bigger picture for the yellow relic is positive as even more sovereign debt has a negative return ($14.5 trillion) making holding an asset that has no yield very enticing.
This week’s highlights are:
One thing to note is that our triple play indicator found an interesting development which is Emerging Markets. Based on our indicator, Emerging Markets are breaking out relative basis but still acting poorly based on pure price action. If we can get a decent bounce and an improved market phase it could be a great opportunity. It could also mean that commodities are getting ready to move quickly off their 100 year lows relative to stocks.(To know more about our indicator, click here).
Best Wishes for your trading