The Market Week In Review- Saturday, Feb. 1

The U.S. stock market ended the week largely downward as fears of the coronavirus’ impact on the global economy outweighs overall better-than-expected corporate earnings. Interest rates also moved lower amid the coronavirus fears as the 10-year treasury yield dropped from 1.68% last week to 1.52% Friday.The price of gold jumped 1.46% to $1,593 an ounce as investors flee to the safe haven metal. The price of crude oil dropped by 5.04% to $51.63 a barrel, which can also be primarily attributed to the fears of the coronavirus.

This Week's Economic Highlights

• Durable goods orders surged by 2.4% in December of 2019 but still finished the year down 2.5% as the trade war caused a scale back in orders. Much of the rise in December’s orders can be attributed to the military as orders for ships and planes skyrocketed 90%. When excluding military orders, durable goods orders fell 2.5% in December.

• The Federal Open Market Committee (FOMC) left the Fed’s fund rate unchanged at a target range of 1.50% to 1.75%, as expected. The FOMC stressed that the U.S. economy is in good shape but will be closely monitoring the severity of the coronavirus and its impact on the global economy.

• Initial unemployment claims fell by 7,000 to a seasonally-adjusted 216,000 for the week ending January 25. Surprisingly, claims for the prior week were revised up by 12,000 to 223,000. That said, the more stable four-week average of initial claims only dropped by 1,750 to 214,500.

• The U.S. economy (GDP) grew at a modest annualized rate of 2.1% in the fourth quarter of 2019 as it gets a boost from a narrowing trade deficit. Consumer spending, which accounts for nearly 70% of GDP rose at an annualized rate of 1.8% in the fourth quarter of 2019, after rising a more substantial 3.2% and 4.6% the two quarters prior.

• In December, consumer spending increased by a moderate 0.3% while personal incomes only rose by 0.2%. Meanwhile the Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation barometer, rose a steady 0.3% in December. However, over the past year PCE has only risen by 1.6%, well below the Fed’s 2.0% target.