January 31, 2020 Weekly Market Recap

This update is a little behind – my apologies! The S&P 500 limped into the close last Friday as fears of a global contagion reverberated through financial markets and rekindled worries of a potential worldwide recession resulting in the worst week for the S&P in six months. New cases of the coronavirus outside of China and the quarantine of more than 45 million Chinese overshadowed upbeat earnings from bellwether stocks like Apple (AAPL), Amazon (AMZN), Starbucks (SBUX), Microsoft (MSFT) and Tesla (TSLA), and wiped out all of its gains for 2020.

The benchmark index closed the week at 3,225.52 down from 3,295.47 last week and down from 3,230.78 at the end of December.

Although geopolitical events weighed on the index as a whole, there were a few standouts thanks to better-than-expected fourth quarter results, primarily in the technology sector. Amazon was catapulted to its highest level on record – surpassing the $1 trillion market cap – on earnings that crushed Wall Street’s expectations. The rally came despite a selling frenzy in stocks that sent the S&P index more than 58 points lower from the prior day’s close.

But while the technology sector was insulated from most of the week’s sell-off, the consumer discretionary sector, down 0.5%, felt the full weight of the fallout from the coronavirus. Carnival Corp (CCL) and Royal Caribbean (RCL) both lost as much as 9% in value this week as investors punished both stocks for a quarantined cruise ship in Italy.

Of the eleven sectors, energy shares suffered the biggest losses amid fears that the quarantine of 3% of China’s population will undermine economic growth. In sympathy with a 4.6% drop in the price of West Texas Intermediate this week, the energy sector was down 5.5% from last Friday’s close, with component stocks Exxon (XOM) down 6.2% and Chevron (CVX) down 4.2% from last week.

After the energy sector, the worst performing sectors were materials, down 3.5% and healthcare, off 3.2%. Utilities was the only sector to end the week positive, up 0.9%.

Source: MT Newswires, YCharts

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About Mike Minter

Mike develops investment portfolio allocations, handles trading and rebalancing, and conducts research and analysis as a Portfolio Manager and Financial Advisor for the firm. As a perpetual student of investing and the markets, Mike considers himself obsessed with the subject. Mike has earned the CERTIFIED FINANCIAL PLANNER™ (CFP®) and Certified Fund Specialist® designations. He is also an active member of the Houston chapter of the Financial Planning Association (FPA).   Read Mike's Profile HereRead More Articles by Mike

Mike Minter

Mike develops investment portfolio allocations, handles trading and rebalancing, and conducts research and analysis as a Portfolio Manager and Financial Advisor for the firm. As a perpetual student of investing and the markets, Mike considers himself obsessed with the subject. Mike has earned the CERTIFIED FINANCIAL PLANNER™ (CFP®) and Certified Fund Specialist® designations. He is also an active member of the Houston chapter of the Financial Planning Association (FPA).

Read Mike's Profile HereRead More Articles by Mike

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