Daily Comments

Japan Q4 GDP was shockingly weak. Apple warned of coronavirus impacts on both supply and demand. Asian markets were mostly lower. On Monday, the Nikkei 225 fell -0.69% followed by a -1.40% slide today, but the Shanghai Composite jumped +2.28% on Monday and followed up with a strong gain of 1.35% today. European equities followed Japan lower, with the FTSE off -0.69% to 7,382.01, the DAX lower by 0.75% to 13,681.19, and the Stoxx 600 ending down -0.38% to 430.33. 10-yr. Bunds yield -0.408%. The Feb. Empire State Manufacturing Survey easily beat expectations at 12.9 and the NAHB Home Builder’s Index for Feb. registered at 74, off from 75 in Jan. Yields on 10-year Notes are 1.559%. The March US$ Index jumped to 99.330. April gold surged nearly $20 to $1,605.60, a 7-year high. March crude ended at $52.08. Due to the coronavirus and ensuing disruptions to commerce, Apple reported that it won’t meet its quarterly revenue target. Other US corporations are also being impacted. The ES started off lower, clawed its way to an ATH late in the day, then slipped to close modestly lower.

As previously announced, China halved tariffs on about $75B of U.S. imports, but coronavirus news still dominates. Asian markets were mostly higher. The Nikkei 225 fell -0.59% but the Shanghai Composite rose +0.38%. The major European markets were mostly negative, but not by much. The FTSE slid -0.58% to 7,409.13, the DAX barely moved, lower by -0.01% to 13,744.21, and the Stoxx 600 was fractionally down at 430.52. 10-yr. Bunds now yield -0.392%. December Business Inventories were +0.1%, as expected. January Retail Sales rose +0.3% (ex-autos +0.3%), Import Prices were unchanged, Export Prices jumped +0.7%, Industrial Production fell -0.3% as expected, and Capacity Utilization eased to 76.8%. Preliminary February Consumer Sentiment is 100.9 vs. at 99.5 forecast. Yields on 10-year Notes are 1.588%. The March US$ Index won’t stop moving upwards, now at 99.020. April gold is closing in on $1,600 again, ending at $1,586.80. Baker-Hughes reported that the U.S. oil rig count for 02/14 unchanged at 790. March crude continues to bounce off recent lows, up 1.23% to $52.05. The ES and NQ managed to squeeze in another ATH, and both closed higher on the week.

A change in counting methodology showed a sharp spike in coronavirus case and traders are anxious to see what’s reported next. Asian markets were lower. The Nikkei 225 gave back -0.14% and the Shanghai Composite fell -0.71%. With renewed viral concerns making headlines, the FTSE slid -1.09% to 7,452.03, the DAX inched -0.03% lower to 13,745.43, and the Stoxx 600 was fractionally down at 431.08. 10-yr. Bunds now yield -0.392%. Initial Claims for 02/07 were a benign 206K. January CPI rose a modest +0.1% (ex-food and energy +0.2%). Yields on 10-year Notes are 1.615%. The March US$ Index is 98.980. April gold gained $7.7, to $1,579.30. March crude closed at $51.57. MarketWatch said, “China on Thursday reported 254 new deaths from the virus over the past 24 hours, while the number of new cases jumped 15,152, after the government applied a new diagnostic method was applied in hard-hit Hubei province.” WHO said the total number of confirmed cases rose to 60,329. Initially, equity markets choked on the latest virus revisions. Prices did recover to ATHs by midmorning, but faded into the red by the close.