Comparative Performance Analysis Of FTSE 100 vs S&P 500 In February 2020

Investors wealth in equity market across the globe have suffered severely in February 2020, as coronavirus spillover becomes catastrophe and investors rushed to dump riskier assets for safe-haven bond and gold. Total confirmed cases due to Coronavirus have soared above 89,000 and death counts has reportedly surpassed 3,000 globally, till date. According to some media report estimates, the equity markets have eroded more than $6 trillion of market value because of the virus outbreak.

Total cases confirmed in China alone now stands at 80,026 and death toll there has reached at around 2912, South Korea has also been hit hard by this China originated virus, and total confirmed cases there stood at 4335 with death counts surging to 26. Third most affected geography is Italy, where confirmed cased stood at 1,703 and death toll increased to 41, while in Iran total confirmed cases have been reported at 978, and the number of people died so far are 55. The Coronavirus spread has expanded to about 69 countries, and the death toll marked its footprint in nearly 14 countries.

The deadly virus spread brought a blood bath in the global equity market and left investors high and dry in February 2020 with trillions of wealth destruction.

FTSE 100 vs S&P 500 – February 2020

Amid jolted market sentiment across the world, a comparative performance analysis of FSTE 100 vs S&P 500 is worth considering.

London's major equity gauge the FTSE 100 index dropped about 11.82% in February 2020, the highest one month fall in a decade long period and highest since October 2008 financial crisis. Whereas, the US major S&P 500 index declined about 8.41% during the same time period, the highest one month fall since December 2018.

FTSE 100 vs S&P 500, daily price chart (Jan 31, 2020 – Feb 28, 2020). (Source: Thomson Reuters)

A humongous sell-off in the equity market across the world have shaken portfolio investors and retail investors equally, tracking the calf path. Many quality stocks are trading at their multiyear lows, but yet investors are keeping a distance from those stocks.

52-week Lows – FTSE 100 vs S&P 500

During the month under review, a total of 35 FTSE 100 constituent companies registered new 52-week lows at the London Stock Exchange against 151 S&P 500 constituents, which registered 52-week lows at the same time.

At Wall Street big names including Verizon Communications Inc, Exxon Mobil Corp, Pfizer Inc, Chevron Corp, Cisco Systems Inc, Wells Fargo & Co, Oracle Corp, Boeing Co and many others registered new 52-week lows in February 2020, which reflects that stocks ranging from a diversified industries segments including Telecommunication services, Oil & Gas, Pharmaceuticals, Banks, Software, Aerospace & Defense, IT Services, Industrial Conglomerates, Tobacco and Automobiles have witnessed steep selling-pressure all across the globe in February 2020. This reminds us of ‘2008 Financial Crisis’, where every single sector delivered a negative return for an extended period.

Here, in this piece of coverage, we are sharing a list of top FTSE 100 stocks that registered new 52-week lows in February 2020.

(Source: Thomson Reuters)

It reflects that in the UK as well, stocks belonging to a diversified range of sectors including Oil, Gas & Consumable Fuels, Banks, Hotels, Restaurants & Leisure, Insurance, Metals & Mining, Health Care Providers & Services, Tobacco nosedived during the month under consideration.

Tour, Travel and Leisure sector stocks hit hard in February 2020.

According to data compiled (from Thomson Reuters) globally, there were approximately 360 Tour, Travel and Leisure companies which registered 52-week lows. Several globally renowned names in this sector including Oriental Land Co Ltd, Marriott International Inc, Compass Group PLC, Restaurant Brands International Inc, Carnival Corp, Sodexo SA, TUI AG, and Whitbread PLC have also registered 52-week lows in February 2020.

However, in UK market Tour, Travel and Leisure stocks like Minoan Group PLC, Safestay PLC, Carnival PLC, SSP Group PLC, 888 Holdings PLC, Quixant PLC, Whitbread PLC, and Compass Group PLC registered new 52-week lows in February 2020.

Technical Overview – UK and US market

Globally, major equity benchmark indices like S&P 500, Dow Jones Industrial Average, Nasdaq Composite and FTSE 100 ended February 2020 substantially lower than their long-term 200-day Simple Moving Averages (SMAs), which is typically considered as bearish market trend.

Also, both the globally tracked indices were trading below their short-term crucial support levels of 5-day, 10-day, 20-day, 30-day, 50-day, and 100-day SMAs, which is again an unfavourable trend.

FTSE 100 Price/200-day SMA ratio stood at 0.901x, which reflects that index is trading approximately 10% below its 200-day SMA and S&P 500’s Price/200-day SMA ratio stood at 0.89x, which reflects index traded approximately 11% below its 200-day SMA, a bearish cycle.

Also, Moving Average Convergence Divergence of both the indices has steeply plunged against 9-day SMA, and the difference between 12-day SMAs and 26-day SMAs is quite negative, which again is an unfavourable trend.