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Investment
February 3, 2020

Coronavirus outbreak rattles markets

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<p><strong>By: Sanisha Packirisamy, Economist at Momentum Investments</strong></p>

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<h2 class="page">Economic and market snapshot for January 2020</h2>

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<p>Momentum Investments has released their monthly economic snapshot for January, detailing the impacts of the deadly coronavirus on global markets as well as, more generally, the state of US, Eurozone and Emerging Markets.</p>

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<h3>Highlights</h3>

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<ul><li><span lang="EN-GB">Financial markets: The deadly coronavirus outbreak has rattled markets, causing a blow to riskier asset classes in January 2020.</span><u></u><u></u></li><li><u></u><span lang="EN-GB">United States (US): The profits cycle has historically been a more important determinant of US equity returns than the political cycle.</span><u></u><u></u></li><li><u></u><span lang="EN-GB">Eurozone: Growth is unlikely to stage a significant rebound in 2020 given headwinds to domestic demand (from slowing growth in jobs and wages) and exports (should the US impose onerous tariffs on the region).</span><u></u><u></u></li><li><u></u><span lang="EN-GB">United Kingdom (UK): In spite of Brexit noise, interest rates were left unchanged at 0.75% in line with expectations, with two members of the Monetary Policy Committee (MPC) calling for a cut in interest rates.</span><u></u><u></u></li><li><u></u><span lang="EN-GB">Emerging markets (EMs): Structural reform efforts and a growth recovery from a low base in a number of previously troubled economies should contribute to higher growth for EMs in 2020.</span><u></u><u></u></li><li><u></u><span lang="EN-GB">South Africa (SA): The postponement of hard-hitting structural reforms is becoming more costly for growth.</span></li></ul>

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<p><strong>Download the full note here:</strong> <a href="https://www.cover.co.za/wp-content/uploads/2020/02/Economic-and-market-commentary-January-2020.pdf">Economic and market commentary - January 2020</a></p>

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