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WEEKLY SUMMARY: Stocks fall amid geopolitical and stagflation fears
Major equity indexes declined during the week after the S&P 500 closing at record highs on Tuesday and Wednesday. However, indexes retreated sharply in the latter half of the week. Many of the week’s headlines centered around tariff news and amid President Trump’s efforts to end the Russia-Ukraine conflict. Investor’s sentiment worsened on Thursday partially due to Walmart’s Q4 earnings report. While the retailer beat estimates for the quarter, its guidance for the year ahead fell short, which led to concerns regarding consumer spending and the health of the overall economy. Elsewhere, the S&P Global flash Composite PMI reading came in at a 17-month low of 50.4. On Friday, the University of Michigan Consumer Sentiment for February showed a drop of nearly 10% month over month to 64.7 with inflation expectations for the year ahead also jumped to 4.3%, up from 3.3% in January. This number, coupled with reports of a new coronavirus discovered in China, drove stocks sharply lower. US Treasuries advance on the back of negative macro surprises. The STOXX Europe 600 Index ended 0.26% higher amid cautious optimism, as investors weighed U.S. trade policy developments and efforts to end the Russia-Ukraine conflict. Mainland Chinese stock markets rose for the week, lifted by strength in technology shares following better-than-expected earnings from some of the country’s leading tech companies. Gold was bid for the 8th straight week as the dollar fell to 2-month lows.
Have a great week-end
Charles for the team