US Equity Markets continued their move to new all-time highs last week, as investors believe that the positive reports around trade between the US and China increase the likelihood that a deal is reached. The S&P 500 increased 0.9% for the week to bring its gains for the year to 23.4%. The Nasdaq rose 1.1% for the week and is now up 27.7% for the year, while the Russell 2000 (small-cap stocks) was up 0.6% for the week to bring its gains for the year to 18.6%.
Global equity markets increased last week as well on the backs of rising hopes for a trade deal despite some weak Chinese economic data. Developed Markets rose 0.6% for the week and is now up 15.5% for the year. Emerging Markets advanced 1.5% for the week to bring its gains for the year to 10.3%.
US Interest Rates rose sharply last week thanks to good US corporate earnings reports and rising optimism around a US-China trade deal. The yield on the 10-Year US Treasury increased to 1.94% last week from 1.71% the prior week. Prior fears of an inverted yield curve have largely abated, as the US 2-Year yield stands at 1.66%, with a positive yield curve now at 0.28%.
Of Interest to Us
US Corporate Earnings reports for the third quarter have continued to come in better than expected. With roughly 90% of US corporate earnings reports in, about 75% of companies have beaten earnings expectations, while 60% have beaten sales forecasts. Both are better than historical norms. While there are still more firms to report, it appears that earnings for the third quarter will be down around 2.4%, weighed down by the Energy sector, though this is better than the 4.1% declines that the Street expected at the end of September.
for the week ending 11/8/2019
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