U.S. shares were seeking direction throughout the week, pausing for breath after a long period of solid gains: Dow and S&P500 were up 0.17 and 0.05 percent respectively while the tech-heavy Nasdaq rose by 0.47 percent. By contrast, Europe and Asia lagged behind the U.S. (MSCI EMU: -1.22 percent, Nikkei225: -2.19 percent, MSCI Asia ex-Japan: -0.32 percent in local currencies) as well as emerging markets (MSCI EM in USD: -1.35 percent).
To be honest, it could have been worse as unfavourable economic news just kept piling up. Thus trade talks between the U.S. and China seemed to teeter (no summit meeting planned before the March 1st deadline) pushing the greenback higher, oil prices nose-dived (WTI down 4.6 percent leading to a weekly loss of 3.28 percent for the S&P energy sector) in the wake of U.S. legislation aiming to prevent OPEC from coordinating production, Treasury bonds bounced a bit more (12-month yield at 252bps, 5-year yield at 244bps), helped by the Non-Manufacturing PMI index for the U.S. falling below exceptations at 56.7 percent in January (vs. 58 in December) with new orders decreasing by 5 percentage points lower than the December reading (i.e. a one-year low). Respondents to the ISM survey confirmed that they were concerned about the impacts of the government shutdown, the longest in U.S. history.
Financials declined (-1.52 percent WTD) on this news. Other sectors also struggled to limit losses (S&P materials: -1.56 percent, S&P healthcare: -0.94 percent in spite of better-than-expected quarterly results from Boston Scientific).
The best performers of the week were technology stocks (+1.23 percent), industrials (+1.52 percent) and utilities (+2 percent).
Find the full report: https://www.trackinsight.com/weekly-flow-report/2019-02-08/global