Last Week: Global markets gyrated last week, driven by trade news. Stocks traded off sharply in the first part of the week on a perceived escalation of U.S.-China trade tensions, then rallied on signs of progress toward a deal. The S&P 500 Index ended up 0.2%, and international stocks posted positive returns as well. The strong labor market report on Friday buoyed markets, as the domestic economy added 266,000 U.S. nonfarm jobs in November, solidly above the consensus expectation of 180,000. The unemployment rate moved down to 3.5%, matching a 50-year low. Average hourly earnings growth remained stable with a year-over-year increase of 3.1%, above the expectation of 3.0%. Stocks rallied on the news, as the data supports continued growth and stable interest rates. Interest rates have traded in a narrow range of late, with the 10-year Treasury ending the week at 1.84%.
Upcoming – What to Watch: A positive jobs report and encouraging news on trade negotiations for a ‘Phase 1’ trade agreement has led to positive returns for the month and quarter so far. This is a welcome change from the selloff we experienced last December. As we near year-end, the themes of trade and economic data will continue to determine market momentum. This week we will have several important events to watch. The Federal Reserve meets Tuesday and Wednesday December 10 and 11, the UK holds elections on Thursday, December 12, and the deadline for the potential imposition of new tariffs on China is Sunday, December 15. We will get economic reports on CPI, PPI, and retails sales this week as well. The focus will be on the continued health of the consumer for the continued support of our economic expansion. According to JP Morgan, for this year, Black Friday online sales totaled $7.4 billion, and Cyber Monday hit $9.4 billion in sales, both records. This was offset by a 6.2% decline in foot traffic to the stores, and holiday retail employment has come under pressure. The jobs report showed a 6% decline in retail employment gains compared to last November. Suffice it to say that eyes will be on the level of consumer spending and sentiment this holiday season.
Weekly Returns and Data
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