The equity markets ebbed and flowed last week on reports of a Phase One trade agreement between the U.S. and China. On Friday, the White House confirmed earlier rumors of an agreement; the markets’ muted reaction reflects the lack of specifics and modest scope of the deal. More details are coming out today and looks like the markets are welcoming the news. Last week, the Nasdaq (0.91%) led the market gains followed by S&P 500® Index (0.73%), the Dow Jones Industrial Average (0.43%) and Ru… View More
Most of the major indices closed fractionally lower for the week even after Friday’s jobs report, an unexpected gain of 266,000 jobs in November, provided the markets an early holiday gift. The estimates, 187,000 non-payroll jobs would still have been an improvement over Octobers’ upwardly revised 156,000 new hires. The unemployment rate fell to 3.5%, a 50-year low; wages increased 3.1% year-over-year. Also, the Michigan consumer confidence index rose to 99.2 compared to estimates of 97.0. F… View More
The global economic environment seems to be healthier than it was a year ago. Notably, we see evidence of more solid growth around the world, and not just in the U.S. as was the case through much of 2018. The consumer sector in particular has been quite strong and has propelled the broader economy. One year ago, investors were highly worried about a global recession, but those risks appear to have faded. In fact, if anything, we think investors may have grown too optimistic over prospects for s… View More
A number of tactical indicators remain overbought, but the historical data would say that’s actually a good thing. Overbought conditions in uptrends are often consistent with better than average future returns and positive hit rates, and their presence is a common feature in durable market advances. Seasonality can reinforce a trend, and the calendar is clearly a tailwind for performance the final 6 weeks of the year. Following several consecutive weeks of gains, the equity markets lost momen… View More
Investors remain at the mercy of trade headlines which are light on substance. The major indices eked out slight gains last week despite contradictory statements on the progress of finalizing the Phase One agreement. The Dow Jones Industrial Average rose 1.17%, followed by the S&P 500® Index (+0.88%), the Nasdaq (+0.77%) and the Russell 2000® Index (-0.15%). Negotiations stalled this week as China stated that it expected a tariff roll back as a condition for an agreement. The U.S. counter… View More