Week of February 10th, 2020 

Delany Higgins

Asia 

• In China, the CSI 300 and Shanghai Composite Indexes rose moderately, while Japan’s Nikkei 225 closed slightly down. 
• Due to new measurement techniques, China announced over 14,800 additional cases of COVID-19, though the rate of spread appeared to be decreasing. 
• China-U.S. relations faltered again after last week’s positive trade news, with announcements that the U.S. Justice Department was bringing new charges against Chinese tech giant Huawei. 

Europe 

• European stocks rose cautiously, with the STOXX Europe 600 closing 1.43% up, and the FTSE largely unchanged. 
• U.K. Chancellor Sajid Javid abruptly resigned from Prime Minister Boris Johnson’s cabinet following a disagreement over advisor choice. Javid will be replaced by Rishi Sunak, who may take a more relaxed approach to budgetary restraint. 
• Despite its best efforts to woo investors on Friday, Royal Bank of Scotland’s stock dipped over 4%. The bank announced plans to rebrand as NatWest Group, to increase its dividend, and to decrease the negative climate impact of its financing. Nonetheless, concerns about its long-term profitability persisted. 
• Bank of England Governor Mark Carney posited a positive approach to Brexit in an interview with Reuters, stating that Britain was working well to address its key problem of low productivity. 

North America 

• U.S. equity benchmarks moved upwards on Friday, with the Dow and S&P gaining over 1%, and the Nasdaq gaining over 2%. In a continuation from last week, investors seemed to be seeing a brighter outlook with news of COVID-19 containment. 
• U.S. Federal Reserve Chairman Jerome Powell testified before the Senate Banking Committee that the Fed was closely monitoring the spread of the coronavirus, comforting investors. 
• The U.S. government reported that retail sales rose 0.3% in January, while industrial production fell by that same amount. 
• The Mexican peso added 0.2% after the central bank cut interest rates yet again.
• Despite the seemingly increased optimism over COVID-19 in equities, U.S. 30-year Treasuries remained popular, with yields reaching a record low. 

Other Markets

• Bitcoin has climbed back above $10,000, from a 2019 high of $4,000.
• The Brazilian real rose 1.26% on Friday, marking its biggest daily gain in two months, as the central bank moved to prevent a currency selloff. 

The views expressed by the author may not reflect the opinions of The St Andrews Economist