Shares bounced back as investors were reassured by positive signals around the trade talks between the U.S. and China, President Trump saying the negotiations were going very well and the March 1st deadline could be extended for a deal. Ignoring the very disappointing retail numbers in the U.S. (surprisingly, retail sales fell 1.2 percent in December for the first time in 10 months), the broad-based indices gained ground almost everywhere around the globe (S&P500: +2.50 percent WTD, MSCI EMU: +3.43 percent, NIKKEI225: +2.74 percent, MSCI All China+HK+Taiwan: +1.11 percent) except for emerging markets (MSCI EM in USD: -0.52 percent).
Overall the best sectors were those which underperformed a week ago, starting with energy (+4.73 percent) thanks to oil prices which surged (WTI crude up 6.51 percent) after OPEC figures showed it had removed 797,000 barrels per day from the market last month. Furthermore, Saudi Arabia announced that it would cut its output in March by 500,000 barrels. Just behind, industrials (+3.53 percent), materials (+3.33 percent), healthcare (+3.19 percent) and financials (+2.87 percent) also set the pace.
Going against the trend, tech stocks (-1.57 percent) and, to a lesser extent, utilities (-0.25 percent) lagged the market after three weeks of positive returns, ranking last over the past 5 days among the S&P industry groupings.
In the bond market, U.S. Treasury prices inched lower, pushing yields a little bit higher with the 10-year yield rising from 263 to 266bps. Safe-haven government bonds became less attractive as risk aversion continued to decline (S&P500 VIX dropping to as low as 14.90, its lowest level in more than four months).
Find the full report here : https://www.trackinsight.com/weekly-flow-report/2019-02-15/global