Archives of “February 20, 2020” day

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China says to roll out more measures to stabilise trade

  
  Analysis

Comments by the Chinese commerce ministry

  • China will study more policies to further stabilise auto consumption
  • Also to lessen the impact of the coronavirus outbreak
China is continuing to reaffirm its commitment to bolster its economy during this period in time and more stimulus measures will only add fuel to the recent stock market rally.
In trading today, Chinese equities closed higher with the Shanghai Composite up by 1.8% while the CSI 300 index closed higher by 2.3%.

Coronavirus – China’s Global Times says “actual number of overall infections … unknown”

  
  Analysis
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Here is a piece ion China’s GT on what is going in Wuhan, the centre of the virus outbreak:

  • Wuhan was still confronted with a severe situation with slow progress. 
  • The actual number of overall infections in the city where the virus originated in December 2019 remained unknown; the number of reported cases in the city accounting for a large portion of total infections in China. 
  • And despite over three weeks of city lockdown, the human-to-human transmission still continued and many patients could still not be treated in time, according to medical experts and observers.
  • It’s time to sound horns for a full-scale mobilization of Wuhan people, 
Link here for more
Here is a piece ion China's GT on what is going in Wuhan, the centre of the virus outbreak:

FOMC minutes: Current policy stance to ‘remain appropriate for a time’

  
  Analysis
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Highlights of the Jan 28-29, 2020  FOMC meeting minutes:

  • Conditions expected in Q2 for T-bill tapering
  • Saw risks to economic activity as ‘somewhat more favorable’ than at previous meeting
  • Expected economic growth to continue at a ‘moderate pace’
  • Cited easing of trade tensions, receding risks from Brexit and stabilizing global growth as reducing downside risks
  • Generally expected trade uncertainty to remain somewhat elevated
  • Agreed threat from virus ‘warranted close watching’
  • Once reserves reach ample levels, regular open market operations will be required over time to accommodate trend growth in Fed’s liabilities and maintain ample reserves
There has been little market reaction to the headlines.
We have heard all these messages before from Powell and other Fed members. It’s a rare moment when the message is very much united and consistent. The market continues to doubt there will be a long period of watching with a 78% chance of a cut priced in at the July meeting.

Eight culprits for yen weakness

  
Analysis, Forex
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What has dropped the yen to the worst levels since May

Bloomberg lays out eight factors:
  1. Dollar demand seen from global central banks especially in 2-year and 5-year notes
  2. Japanese moves ahead of year end
  3. Short covering and a run on stops
  4. A surge in yen options trading on the break of 110.00 and related to coronavirus fears
  5. An unwind of shorts in USD/JPY and EUR/JPY
  6. Chinese measure to support parts of its economy reduced safe-haven demand
  7. Technical momentum
  8. Worries about a recession in Japan
Many of these overlap but that’s the buzz.

S&P and NASDAQ close at record levels

  
Analysis, US Market

NASDAQ index leads the charge with the 0.87% gain

The major indices are all closing higher with the NASDAQ and S&P closing at record levels. The NASDAQ index led the way. It was up over 1% at the highs today but backed off into the close.
The final numbers are showing:
  • S&P index, +15.81 points or 0.47% at 3386.10
  • Nasdaq index up 84.437 points or 0.87% at 9817.18
  • Dow industrial average up 115.63 points or 0.4% at 29347.83.
The NASDAQ index was led by Tesla with a gain of 6.82%. Other big gainers for the index included:
  • Nvidia, +6.13%
  • Analog Devices, +4.45%
  • Incyte, +4.06%
  • Micron, +3.88%
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