Hello and welcome to this week’s Jones Financial Blog! Our goal at Jones & Associates is to help keep you up to date with interesting current economic/market happenings as well as some proprietary portfolio happenings. Knowledge is power and thought we would share some of ours with you. Enjoy!
All data is for the week ended February 21, 2020.
Equity markets are opening lower today around the globe as the coronavirus continues to spread outside of China — adding to concerns of economic growth worldwide. Nearly one-half of the cases outside of China have been diagnosed in the last four days. Globally, the number of cases exceeds 79,000 with deaths in excess of 2,600. (1)
Last week markets declined across the major markets, with the S&P 500 down 1.22%, the Russell 2000 down 0.52%, the NASDAQ off 1.55%, international developed markets reduced by 1.23% and emerging markets down 1.96%. Real estate and staples were virtually unchanged in the US while technology and industrials were the worst performing sectors. (2)
US government bonds are seeing increased demand this morning, with the benchmark 10-year Treasuries being bid up, for an indicated opening around 1.36% versus Friday’s close of 1.46%. This had been a 13 basis point decline in rates in one week and a 46 basis point drop since the start of this year. (2)
Likewise, gold (GLDM), an Endowment Series and Precious Metals holding, is realizing higher prices this morning on fears of the impact from the coronavirus. Last week gold closed at $1,643 per ounce, up 8.4% year-to-date and 23.4% higher on a year-over-year basis. (2)
New housing starts in January were much stronger than expected, reported at 1.57 million units versus consensus expectations of 1.39 million. The December report was also adjusted upward to the highest rate in 14 years. Building permits (which precede starts by several months) were also stronger than predicted, with 1.55 million announced versus 1.46 million anticipated. That is nearly a 13 year high. (3)
Proprietary portfolio happenings:
BioMarin Pharmaceuticals (BRMN), a Core Select and G33 holding, received early priority review from the FDA for its drug to treat adults with hemophilia A, the first such application accepted for a gene therapy product for any type of hemophilia in the U.S. (4) Shares rose 6.9% for the week.
Diamondback Energy Inc. (FANG), a Core Select and Energy Select holding, announced revenues and earnings that were well ahead of expectations, with a 74% year-over-year revenue increase on a 65% gain in oil production volume. Management endorsed prior 2020 guidance. (5) Shares were up 7% on the news.
HealthEquity Inc. (HQY), a G33 holding, management gave updated guidance to fourth quarter revenues and earnings that exceeded expectations and raised guidance for the full year. (6) Shares rose 15.7% for the week.
Did You Know? Queen’s Bohemian Rhapsody is the most popular song that British people request to be played after their funeral, according to Farewill, the online will writing service, which has analyzed tens of thousands of wills over the past 12 months. (Source: Financial Times)
Sources: (1) Reuters “Coronavirus Cases Spread Outside China” 2-23-20, (2) JP Morgan Weekly Market Recap 2-24-20, (3) US Census Bureau 2-19-20, (4) BioMarin Pharmaceutical press release 2-20-20, (5) Diamondback Energy Inc. press release 2-18-20, (6) HealthEquity Year-End Sales Metrics 2-18-20