December 9 - December 13 Week in Review

It was another record-setting week for the markets last week. The S&P 500 gained 0.7%, the Dow Jones Industrial Average 0.4%, and the Nasdaq Composite 0.9%, all setting new intraday highs in the process. The small cap Russell 2000 was the laggard, increasing 0.3%.

Nine of the 11 S&P 500 sectors finished higher, with the information technology sector outperforming by a wide margin amid strength in the semiconductor space. As evidence of the move the Philadelphia Semiconductor Index rose 4.2% for the week. The real estate sector was the worst performer last week, and the communication services sector finished modestly lower as well.

Video 12.16.2019

After falling early in the week the market gained strength on Wednesday and rallied from there. The big news was the announcement by the Chinese that a trade deal had been reached and that tariffs due to start on December 15th would be delayed. As part of the agreement the USTR confirmed that the tariff rate on $250 billion of Chinese imports will remain at 25%, the tariff rate on $120 billion of Chinese imports will be cut to 7.5% from 15%, and China will commit to purchase additional U.S. farm goods. Agricultural purchases will reportedly be between $40-50 billion over a two year period. President Trump added that Phase Two discussions will begin immediately, which should focus on issues pertaining to forced technology transfers and IP rights, according to NEC Director Kudlow.

Trade dominated the headlines and dictated the price action in the markets, but this week also included FOMC and ECB policy decisions, a U.K. election, a USMCA agreement, a budget deal, and the Retail Sales Report and Consumer Price Index for November.

On the interest rate front the Fed left rates unchanged, signaling no rate hike are likely in 2020. The ECB left rates unchanged as well. In the U.K. election the Conservative Party won in a landslide, setting up a Brexit by January 31st. In other trade news a USMCA deal was reached between the U.S., Mexico and Canada. In Congress a bipartisan budget deal was reportedly reached last week. On the economic front retail sales and consumer prices for November increased less than expected.

U.S. Treasuries had another week of wild swings but ultimately finished near their unchanged marks from last week. Both the 2 year yield and 10 year yield declined one basis point each to 1.60% and 1.82%, respectively.

In other markets the U.S. Dollar Index fell 0.5% to 97.19 and WTI crude rose 2.8% to $60.11 a barrel.

December 16 – December 20 Economic Calendar

  • Monday
  • Empire State Mfg Survey
    8:30 AM ET
  • PMI Composite Flash
    9:45 AM ET
  • Housing Market Index
    10:00 AM ET
  • Treasury International Capital
    4:00 PM ET
  • Tuesday
  • Housing Starts
    8:30 AM ET
  • Redbook
    8:55 AM ET
  • Industrial Production
    9:15 AM ET

  • JOLTS
    10:00 AM ET

  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET







  • Thursday
  • Jobless Claims
    8:30 AM ET
  • Philadelphia Fed Business Outlook Survey
    8:30 AM ET
  • Current Account
    8:30 AM ET
  • Existing Home Sales
    10:00 AM ET

  • Leading Indicators
    10:00 AM ET

  • EIA Natural Gas Report
    10:30 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
    • Friday
    • GDP
      8:30 AM ET
    • Corporate Profits
      8:30 AM ET
    • Personal Income and Outlays
      10:00 AM ET
    • Consumer Sentiment
      10:00 AM ET
    • Kansas City Fed Manufacturing Index
      11:00 AM ET
    • Baker-Hughes Rig Count
      1:00 PM ET

 


 

 

 

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This commentary is a matter of opinion and is for informational purposes only. It is not intended as investment advice and does not address or account for individual investor circumstances. Investment decisions should always be made based on the client's specific financial needs, goals and objectives, time horizon and risk tolerance. The statements contained herein are based solely upon the opinions of Telemus Capital, LLC. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.

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