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%.
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.
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.”
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.
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: NOTABLE COMPANIES REPORTING EARNINGS
Tuesday: FedEx (FDX)
Wednesday: General Mills (GIS), Micron Technologies (MU), Paychex (PAYX)
Thursday: Accenture (ACN), Nike (NKE)
Friday: CarMax (KMX)
This is the last full trading week of the year. With the Christmas and New Year’s holidays falling on Wednesday the next two weeks, trading volume will be especially light the last two weeks of the year. With a “light” trade deal allegedly on the books with China, there shouldn’t be too much to derail the stock market this week. After the first of the year, when the good will from the holidays has worn off, the market can begin to worry again. As for the rest of the year though, it looks like Santa is coming to town.
We are honored and humbled to serve you. From our families to yours, everyone from Guardian Wealth Management wishes you the best the holidays have to offer and a happy, healthy new year ahead.