It was another record-setting week for US Equity Markets last week; while details remain sparse, the US and China struck a Phase One trade deal that avoided the imposition of additional tariffs on December 15th. The US also approved the trade deal between the US, Mexico, and Canada. As a result, the S&P 500 hit another all-time high, up 0.7% for the week to bring its gains for the year to 26.4%. The Nasdaq rallied 0.9% for the week and is now up 31.6% for the year, while the Russell 2000 (small-cap stocks) rose 0.3% for the week to bring its gains for the year to 21.5%.
Global equity markets posted even more impressive returns, as investor sentiment was bolstered by the pending US-China trade agreement and UK election results that should pave the way for the completion of Brexit by the end of January. Developed Markets rallied 1.6% for the week to bring its gains for the year to 17.6%. Emerging Markets surged 3.6% for the week and are now up 12.6% for the year.
The Federal Reserve met this week, and Chairman Powell made it clear that the probability of the Fed moving rates in either direction in the foreseeable future is low. The yield on the US 10-Year Treasury dipped to 1.82% from 1.84% the prior week. The US 2-Year Treasury sits at 1.61%, so the yield curve remains positively sloped by 0.21%.
Of Interest to Us
The NFIB Small Business Optimism Index for November posted its largest month-over-month gain since May 2018, as already-high confidence among business owners improved following growing uncertainty the prior couple of months. The index saw 7 of its 10 components rising in November, led by improving profit trends, a positive outlook for business expansion, and a positive outlook for business conditions. Small business is an important part of the US economy, so optimism among this group should bode well for the broader US economy.
for the week ending 12/13/2019
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