Unsurprisingly, stock markets turned lower this week (S&P500: -2.16 percent, its biggest weekly decline since the end of 2018, Nikkei225: -2.67 percent, MSCI All China+HK+Taiwan: -2.08 percent) as Chinese exports suffered a massive drop in February (-20.7 percent, i.e. four times lower than market expectations!) and U.S. job creation plunged to its lowest level in over a year. The ECB also stirred fears of global economic slowdown slashing its 2019 economic growth forecast. The EUR-USD pair logically lost ground on this news (-1.14 percent). The same held true of European stocks (MSCI EMU: -1.24 percent).
Only one sector weathered the storm (utilities: +0.7 percent WTD). All the others were down, especially industrials (-2.86 percent) with the slump in General Electric (-6.63 percent) and healthcare stocks (-3.87 percent) as shares of big pharma and biotech companies tumbled, one day after U.S. FDA Commissioner Scott Gottlieb resigned from his post in a surprise move. Lastly, energy slipped 3.96 percent, the most among major S&P sectors, after data from the American Petroleum Institute showed a larger-than-expected increase in U.S. crude stockpiles.
Nevertheless, every cloud has a silver lining. This “period of of continued weakness and pervasive uncertainty”, as stressed by ECB President Mario Draghi, also tends to favour bonds over stocks. The pendulum therefore swung back at the beginning of March. The 10-Year U.S. and German Treasury yields decreased by 12bps and 11bps respectively.
Find the full report here : https://www.trackinsight.com/weekly-flow-report/2019-03-08/global