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Ivan Gruhl, Chief Investment Officer, HK Financial Services

 

Top of the morning: Stocks are higher pre-market.  As of 7:45 CST this morning,  the Dow is up about 160 points and the S&P 500 is up 0.5%.  Bond yields are close to where we started the year, with the 2-year Treasury at 2.51% and the 10-year at 2.68%.  China local stocks (Shanghai) are up over 5.5%, presumably on optimism that a trade deal will be reached.

Overview: Global stock markets advanced following a week of productive high-level trade talks between the US and China. Non-US stocks led the way with emerging markets (MSCI EM) up 2.8% and international developed (MSCI EAFE) up 1.7%.  Domestically, the S&P 500 gained 0.7% for the week.  Easing trade tensions, rising equity markets and hopes for production cuts lifted oil prices to 2019 highs last week.  WTI crude oil finished the week up 3.6% at $57.26 per barrel and is now up about 20% for the year-to-date.

Minutes from the January FOMC meeting were released last Wednesday and suggested a neutral approach by policymakers.  Members agreed that it was important to be flexible on any future rate increases as well as balance sheet normalization. Futures markets are now pricing in no rate increases for the remainder of 2019.  Stable rates have led to modest but stable bond returns, with the Aggregate index up about 1.2% for the year-to-date.

 

Weekly Returns and Data

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