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Castlestone ManagementAuthor: Castlestone
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Castlestone Weekly Market Update 7th March 2020
Episode 6
Sunday, 8 March, 2020
WEEKLY COMMENTARY – 03.07.2020 U.S. Equities Stocks ended a volatile week with slight gains, as the spread of the viral coronavirus cast a shadow over economic activity, accelerating purchases of assets perceived as safe havens and placing additional pressure on those considered risky, like stocks. Volatility reappeared as the CBOE Volatility Index (VIX) spiked to over 40. The Dow has already registered swings of 3% or greater on five occasions so far in 2020. That is the most since 2018, which produced five such swings for the entire year. The volatility is a result of the uncertainty surrounding the spread of the repertory virus. On the week the Dow gained1.8% to settle at 25,864.78, the S&P 500 added 0.6% to 2,972.37 and the Nasdaq inched up 0.1% to 8,575.62. Treasuries Treasury yields continued to slide this week as investors moved into the perceived safety of bonds and the FOMC’s emergency 50 basis cut, helped push bond yields to record lows. The 10-year Treasury note yield, registered its biggest weekly drop since December of 2008, falling 41.8 basis points on the week. The 2-year note tumbled 39.2 basis points over the last 5 sessions and the 30-year slid 44.2 basis points. Dollar The US Dollar declined by more than 2% last week as measured by the ICE Dollar Index. Gold Gold futures finished higher for the week, as selling in stocks and sliding bond yields helped the precious metal to pick up $105.70 over the course of the week, marking the sharpest weekly point and percentage gain since 2011. Crude Oil Oil continued to fall last week, pushed lower by the uncertainty of global demand and slammed Friday as a deal to cut production between the Organization of the Petroleum Exporting Countries and its allies, collapsed when Russia left the meeting. For the week WTI crude traded 7.8% lower, while Brent crude has lost 8.9%.
