U.S. Treasury yields rose last week, led by 5-year maturities. Investors were optimistic over Chinese efforts to contain the coronavirus, along with stronger-than-expected U.S. economic data, pushing yields higher and prices down. Market expectations for Federal Reserve (Fed) rate cuts in 2020 fluctuated during the week, ending at approximately 1.5 cuts through the remainder of the year.

PMC Weekly Market Brief: February 10, 2020

U.S. Treasury yields rose last week, led by 5-year maturities. Investors were optimistic over Chinese efforts to contain the coronavirus, along with stronger-than-expected U.S. economic data, pushing yields higher and prices down.

The ongoing coronavirus crisis dominated financial headlines last week, although investors also focused on the positives of continued solid corporate earnings, good economic data and the U.S. political backdrop. On balance, the good news won out last week, as equities rebounded following two weeks of more than -1% drops in the S&P 500 Index to rise 3.2%, the best weekly performance since last June.

Market performance since early December has been a story of two phases: Emerging market (EM) equities had rallied and U.S. equities moved in line with global equities until the coronavirus outbreak in late January, reinforcing views in our 2020 Global Outlook.