InvestNow News – 13th Mar 20 – Mint Portfolio Returns & Commentaries – March 2020
Global equity markets endured a significant correction late in February. The US market was down 8.2% for the month, but was up in the early part of the month on confidence that China’s unprecedented efforts to contain the Covid-19 virus would be successful. With evidence later in the month that the outbreak was spreading beyond China, the market became increasingly concerned and the US market fell 11.5% in the last week of February. Other global markets experienced similar behaviour, with the UK market down 9.0%, European markets down 8.4% and the Japanese market down 8.8%. Global bond yields too fell sharply (i.e. bond values rose) with the US 10 year bond finishing at 1.14% and the Australian 10 year bond at 0.82%.
The Australian (-7.7%) and NZ markets (-3.9%) followed suit. February was reporting season across both markets and, while earnings expectations for the period ending December were generally fine, all eyes were on the outlook statements. Some of the more obvious sectors at risk reported early impacts of the virus – e.g. the airlines and tourism related stocks – but, in New Zealand, only a small proportion of companies downgraded because of Covid-19.