EZ Bites -- Week Ending 01/31/20

OUR FEBRUARY NEWSLETTERS CAME OUT LAST SUNDAY, JANUARY 26th.

Excerpt from last week's EZTracker newsletter: 

Looking back to other pandemic health threats such as SARS (2003) and Ebola (2014), in both cases it took approximately three months for the markets to reflect and emerge, with the S&P 500 declining over that period but then recovering all its losses each time. Although we cannot predict the markets, the EZTracker team will be hyper-vigilant in watching this fluid situation, and if there is cause for any changes to our model portfolios, we will announce. In the meantime, this is an opportunity to reassess your risk tolerance and ensure your portfolio correctly reflects it. Remember, having patience and maintaining a long-term investment horizon are essential to achieving investment success in any market. This seems particularly true in the current market environment. 

For the Week:

DOW:-2.5% (YTD -1.0%) NASDAQ:-1.8% (+2.0%) S&P:-2.0% (-0.2%)

Stocks tumbled on Friday as worries about China’s coronavirus outbreak started taking a toll on investor sentiment. 

World News: The latest figures from China’s National Health Commission say that at least 259 people have died and about 12,000 have been sickened from the coronavirus that began in Wuhan, China. The number of people sickened now exceeds the global total infected with SARS, which killed nearly 800 people in 2002-2003. So far the death toll from the current epidemic remains lower.

President Trump late Friday declared a U.S. public health emergency in response to the coronavirus outbreak, ordering up to a 14-day quarantine for citizens returning from China’s Hubei province and denying entry to some foreigners.

Corporate News: Delta Air Lines (DAL), American Airlines Group (AAL), and United Airlines Holdings (UAL) announced Friday that they’ll suspend all flights to China, effective through at least late March. Other airlines around the world have also suspended some routes to China, including British Airways, Air Seoul, Lufthansa Group, Cathay Pacific, Air India, and Air Canada.

Economic Data: U.S. consumer spending rose modestly in December to cap off a decent holiday shopping season, but the increase in outlays in 2019 was the smallest in three years, the government reported. Fourth-quarter employment costs in the U.S. rose 0.7% in the fourth quarter, but the increase in wage and benefits for the full year of 2019 slowed to a 2.7% pace.

Sectors: Leaders: Utilities (+0.9%), Consumer Discretionary (-0.5%), and Staples (-0.6%) Laggards: Energy (-5.6%), Materials (-3.5%), and Health Care (-3.2%).

Fixed Income: The U.S. Treasury market experienced flight-to-quality activity on the back of coronavirus, leading the 2-yr yield to drop 16 basis points to 1.33%, and the 10-yr yield to drop 19 basis points to 1.51%. 

OUR MARCH NEWSLETTERS COME OUT SUNDAY, FEBRUARY 23th.

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