Week of January 20th, 2020

Delany Higgins

Asia 

The coronavirus outbreak caused the most substantial single-day decline in Chinese stocks in the past eight months, with the Shanghai Composite Index losing 3.8% over the course of the week. 

Japanese stocks fell, though the yen strengthened somewhat. Japanese exports have been falling, and it is unclear whether progress in U.S.-China will improve the outlook there. The Bank of Japan determined to maintain its long-term macroeconomic policy,  and anticipates a positive outlook for the economy in the coming year

Russia

The Russian market suffered significantly from the drop in natural gas prices and coronavirus fears, but the new prime minister Mikhail Mishustin revealed his cabinet, which analysts believe will help the economy by increasing long-term stability.

Europe

Stocks recovered from last week’s fears about the German economy and coronavirus with WHO confidence in the outlook for the virus’s outbreak. The pan-European STOXX Europe 600 Index was up 0.08% at the end of the week, though the FTSE fell 0.55%. 

U.K. Chancellor Sajid Javid expressed the government’s intention to seek less alignment with European regulations, causing some anxiety for both UK and EU manufacturers, but Javid maintained the government’s prioritisation of the ‘interests of British business’. 

Representatives from the U.S. indicated trade negotiations with both the EU and the UK were ongoing, with President Trump threatening tariffs on European cars. 

Outside of Germany and France, output growth decreased to the lowest point in nearly seven years.

North America 

In the U.S., Friday saw stocks close lower with investor concern about the coronavirus outbreak in China, and the second definitive case in the U.S. Investor concern hit travel and gaming particularly hard, driving safer investments; Treasuries closed with notably low yields.

South America 

Negotiations for Brazil to potentially join OPEC boosted the stock market there.