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Overview: Stock markets rallied Tuesday on news of a trade agreement between the U.S. and China before leveling off midweek on mixed economic news. Global stocks benefited from generally good third quarter earnings and easing geopolitical tensions. International stocks led the way, with the MSCI EAFE and MSCI EM indices each up about 1.2% for the week. U.S. stocks were up (S&P 500 index up 0.55%), and bonds held steady with the 10-year Treasury ending at a 1.75% yield. The yield on the Bloomberg Barclays U.S. Aggregate Bond index has fallen to 2.31% from 3.28% at the start of 2019. On a total return basis, the U.S. taxable bond market has gained 8.3% for the year, and municipals are up almost 7%.

Away from the U.S., highlights were a draft of the U.K.-EU Brexit deal that would be welcome news for markets, but that still needs to be verified by the U.K. parliament. On the economic front, China’s Gross Domestic Product (GDP) decelerated to 6.0%, the slowest pace in almost two decades. Last week, the International Monetary Fund released its latest World Economic Outlook in which it downgraded 2019 global growth to 3.0%, the slowest pace since the Great Financial Crisis. The report cited a broad-based softening in manufacturing as the reason for a synchronized slowdown, driven by higher tariffs and uncertainty surrounding trade and geopolitics. Recent news has reduced some of this uncertainty, with the U.S. and China announcing discussions of the first phase of an agreement, and the EU and U.K. signaling a Brexit deal. However, the reality is that there is still plenty of work to be done before sounding the all clear, and global growth is likely to remain below trend for the foreseeable future.

This communication is for informational purposes only. It is not intended as investment advice or an offer or solicitation for the purchase or sale of any financial instrument.

Indices are unmanaged, represent past performance, do not incur fees or expenses, and cannot be invested into directly. Past performance is no guarantee of future results. 2786393