Weekly Market Recap
Asia Pacific
02/03/2020
Week in review
- Construction work done contracts 1.4% q/q
- Capital expenditure contracts 2.8% q/q
- Private sector credit increase 0.3% m/m
Week ahead
- China CaixinPMI manufacturing
- RBA official cash rate
- Australia 4Q real GDP
Thought of the week
The swift nature of the correction in global equities has caught investors off guard. This week’s chart looks at past instances of 10% market corrections for the U.S. S&P 500 from its peak. The current correction is the fastest in history, taking only six days. The 10% drop in 2018 was close at nine days, but otherwise investors would need to go back along way to find another correction as rapid. There are two questions investors now have to grapple with. The first is whether the market reaction has been overdone given the figures surrounding the spread of the coronavirus outside of China remain low as a share of the population. The second is whether the market recovery will be as swift. Too soon to tell on either.
Number of days for the S&P to fall 10% from its peak
Days
Source:FactSet, Standard & Poors, J.P. Morgan Asset Management, all returns in local currency unless otherwise stated.
Equity price levels and returns: Levels are prices and returns represent total returns for stated period.
Bond yields and returns: Yields are yield to maturity for government bonds and yield to worst for corporate bonds. All returns represent total returns. AusBond Comp is the AusBond Composite 0+ Yr,AusBond IG is the AusBond Credit 0+ Yr both provided by Bloomberg.
Currencies: All cross rates are against the Australian dollar. An appreciation of the foreign currency against the Australian dollar would be positive and a depreciation of the foreign currency against the Australian dollar would be negative.
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