The Week On Wall Street
The U.S. and China announced a limited trade agreement last week. That news lifted U.S. and foreign stocks, leading to weekly gains.
Advancing 0.91% on the week, the Nasdaq Composite outperformed the S&P 500 (up 0.73%) and Dow Jones Industrial Average (up 0.43%). The MSCI EAFE index, measuring the performance of developed markets overseas, improved 0.42%.1,2
Phase-One Trade Deal Reached, December Tariffs Averted
Friday, White House and Chinese officials confirmed an agreement on what has been characterized as an initial step toward a larger trade pact. As a result of this phase-one deal, new U.S. tariffs (slated to go into effect on December 15) were canceled. The 15% tariffs (imposed on $110 billion of Chinese goods in September) now fall to 7.5%.
In return, China has committed to buying greater quantities of American crops, factory goods, and energy products.3
Fed Holds Steady On Short-Term Interest Rates
The last Federal Reserve meeting of the year brought no adjustment for the federal funds rate. The vote to leave short-term rates unchanged was unanimous.
After the meeting, Fed chair Jerome Powell told the media, “as long as incoming information about the economy remains broadly consistent with [our] outlook, the current stance of monetary policy will likely remain appropriate.” 4
Retail Sales Disappoint
Economists, surveyed by Bloomberg, expected a retail sales gain of 0.5% for November, but according to the Department of Commerce, the advance was only 0.2%. In a bright spot for analysts who wanted to see a strong start to the holiday shopping season, sales at online retailers rose 0.8% last month.5
The Week Ahead: Key Economic Data
- Tuesday: The Census Bureau offers a snapshot of November residential construction activity.
- Thursday: A look at November existing home sales from the National Association of Realtors.
- Friday: November personal spending data and the third estimate of third-quarter economic expansion from the federal government, plus the year’s final University of Michigan Consumer Sentiment Index (which measures consumer confidence levels).
The Week Ahead: Companies Reporting Earnings
- Tuesday: FedEx (FDX)
- Wednesday: General Mills (GIS), Micron Technologies (MU), Paychex (PAYX)
- Thursday: Accenture (ACN), Nike (NKE)
- Friday: CarMax (KMX)
|Market Index||Close Dec 13||Week %||YTD %|
|Treasury||Close Dec 13||Week %||YTD %|
|10 Year Note||1.82%||-0.02||-0.87|
Sources: wsj.com, treasury.gov – 12/13/19
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. Weekly and year-to-date market index returns are expressed as percentages. 10-year Treasury note yield = projected return on investment, expressed as a percentage, on the U.S. government’s 10-year bond. Weekly and year-to-date 10-year Treasury note yield differences are expressed in basis points.