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Mid-Week Market Minute 01.15.20

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Mid-Week Market Update Photo

Global stocks nudged higher mid-week following the long-awaited signing of the U.S. – China Phase 1 trade deal on Wednesday. According to a U.S. trade representative fact sheet, the Phase 1 agreement requires “structural reform and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange”. On paper, the deal appears to be a step in the right direction, while it is yet to be determined whether the U.S. will be able to enforce the tenets of the deal and hold China accountable to the terms. In the meantime, tensions between the U.S and Iran have de-escalated with crude oil now trading around $58 per barrel after going as high as $64 just a couple of weeks ago. Earnings season kicked off this week with most major financial institutions releasing fourth quarter results. According to FactSet, 30 of the S&P 500 companies have released their quarterly numbers, with about 82% of those posting better-than-expected profits. On the economic front, CPI and PPI data came in softer than expected, in-line with the markets consensus for muted inflation pressures going forward.

 

Source: Morningstar Direct, WSJ Market Data, GSAM, Bloomberg