The Market Bull – February 28, 2020
The major averages finish mixed after recovering much of their early losses. The days economic data was generally positive. Since Monday the Standard and Poors 500 Index lost 304 points or 9.3% while the NASDAQ gave up 621 points or 6.8%. A very bruising week compliments of the Coronavirus.
Personal spending advanced .1% in January, about where it has been for the last 4-months. Led by durable goods spending, though this category has also been weak of late. The savings rate increased to nearly 8% a gain of .46% for the month.
Personal income advanced an impressive .6% in January, double expectations. Strength was seen in transfer payments, wages, small business and rental income. Broad based gains such as these have been hard to come by of late though it would seem that personal income growth is trending higher into 2020.
The Fed’s favorite inflation measuring metric the Personal Consumption Expenditure deflator increased .1% in January pushing the annualized rate to 1.7%, still below the Fed’s desired 2% target. All of these reports warned of the negative effects the Coronavirus would visit on the global economy in the coming months. With the virus looking to break containment and spread rapidly around the globe supply chain disruption is expected to be severe and will likely trigger a global recession later this year.
Standard and Poors 500 Index closed at: 2,954.22 down 24.54
NASDAQ finished the day: 8,567.37 up .89
Gold ended trading at: $1,581.50 down $61.00