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Monthly Markets Review - January 2020

 

A look back at markets in January when the spread of coronavirus saw investors favour 'safe haven' assets like government bonds.

Global equities, as measured by the MSCI World index, declined in January as the spread of coronavirus reduced investors’ appetite for risk. Assets perceived as safe havens, such as government bonds, performed well.

US shares were flat overall. They carried strong momentum into the new year but mounting fears over the spread of the coronavirus erased the early gains. Energy stocks were especially hard-hit.

Coronavirus concerns led to a lower start to the year for Eurozone equities. The weakest sectors included energy, materials and consumer discretionary. Companies with significant exposure to China underperformed.

UK equities fell in January. The end of the month marked the UK’s official departure from the EU and its entry into a transition period. Sterling was volatile, gaining sharply after the Bank of England kept interest rates unchanged.

Japanese shares fell as news coverage emphasised the spread of coronavirus. The yen was slightly more volatile against the US dollar than in recent months although the actual yen/dollar rate ended January almost unchanged.

Emerging markets (EM) equities also lost value. Commodity price falls weighed on sentiment towards a number of countries, notably Brazil, Chile, Colombia and South Africa.

Government bond yields fell significantly over the month (meaning prices rose) amid investor caution and central banks reaffirming accommodative stances.


Important information:
Please note any past performance mentioned is not a guide to future performance and may not be repeated. The sectors, securities, regions and countries shown are for illustrative purposes only and are not to be considered a recommendation to buy or sell. Aspect8 Limited is a member of Best Practice IFA Group Limited which is authorised and regulated by the Financial Conduct Authority. Registered office Holmwood House, Broadlands Business Campus, Langhurstwood Road, Horsham, West Sussex, RH12 4QP. Registration in England No 07572431.




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