In this week’s recap: the U.S. and China reach a phase-one
trade deal, the Fed leaves the benchmark interest rate alone, and November
retail sales come in below expectations.
Weekly Economic Update
Presented by Troy
L Thompson, CFP December 18, 2019
THE WEEK ON WALL STREET
The
U.S. and China announced a limited trade agreement last week. That news lifted
U.S. and foreign stocks, leading to weekly gains.
Advancing
0.91% on the week, the Nasdaq Composite outperformed the S&P 500 (up 0.73%)
and Dow Jones Industrial Average (up 0.43%). The MSCI EAFE index, measuring the
performance of developed markets overseas, improved 0.42%.1,2
Phase-One Trade Deal
Reached, December Tariffs Averted
Friday,
White House and Chinese officials confirmed an agreement on what has been characterized
as an initial step toward a larger trade pact. As a result of this phase-one
deal, new U.S. tariffs (slated to go into effect on December 15) were canceled.
The 15% tariffs (imposed on $110 billion of Chinese goods in September) now
fall to 7.5%.
In
return, China has committed to buying greater quantities of American crops,
factory goods, and energy products.3
Fed Holds Steady on
Short-Term Interest Rates
The
last Federal Reserve meeting of the year brought no adjustment for the federal
funds rate. The vote to leave short-term rates unchanged was unanimous.
After
the meeting, Fed chair Jerome Powell told the media, “as long as incoming
information about the economy remains broadly consistent with [our] outlook,
the current stance of monetary policy will likely remain appropriate.” 4
Retail Sales Disappoint
Economists,
surveyed by Bloomberg, expected a retail
sales gain of 0.5% for November, but according to
the Department of Commerce, the advance was only 0.2%. In a bright spot for
analysts who wanted to see a strong start to the holiday shopping season, sales
at online retailers rose 0.8% last month.5
Note:
There will be no Weekly Economic Update next week, but we will be back on
December 30 with a special “Year-in-Review” edition of the WEU. Have a happy
holiday season!
T I P O
F T H E W E E K
When you schedule home repairs or home improvements, double-check that the contractor you hire is licensed, fully bonded, and insured. If that is not the case, you could be assuming unnecessary risk during their visit.
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: The Census Bureau offers a snapshot
of November residential construction activity.
Thursday: A look at November existing home
sales from the National Association of Realtors.
Friday: November personal spending data and
the third estimate of third-quarter economic expansion from the federal
government, plus the year’s final University of Michigan Consumer Sentiment
Index (which measures consumer confidence levels).
Source:
Econoday, December 13, 2019
The Econoday economic calendar lists upcoming U.S. economic data
releases (including key economic indicators), Federal Reserve policy meetings,
and speaking engagements of Federal Reserve officials. The content is developed
from sources believed to be providing accurate information. The forecasts or
forward-looking statements are based on assumptions and may not materialize.
The forecasts also are subject to revision.
THE WEEK AHEAD: COMPANIES REPORTING
EARNINGS
Tuesday: FedEx (FDX)
Wednesday: General Mills (GIS), Micron
Technologies (MU), Paychex (PAYX)
Thursday: Accenture (ACN), Nike (NKE)
Friday: CarMax (KMX)
Source:
Zacks.com, December 13, 2019
Companies
mentioned are for informational purposes only. It should not be considered a
solicitation for the purchase or sale of the securities. Any investment should
be consistent with your objectives, time frame, and risk tolerance. The return
and principal value of investments will fluctuate as market conditions change.
When sold, investments may be worth more or less than their original cost.
Companies may reschedule when they report earnings without notice.
Q U O T E O
F T H E W E E K
“Nothing
in the world is permanent, and we’re
foolish when we ask anything to last,
but surely we’re still more foolish not to take delight in it while we have it.”
W.
SOMERSET MAUGHAM
T H E W E E
K L Y R I D D L E
The more places I be, the less you can see. What am I?
LAST
WEEK’S RIDDLE: Suppose you have two twins, three triplets and four quadruplets.
How many people do you have?
ANSWER:
9. Two twins are 2 people, three triplets are 3 people, and four quadruplets
are 4 people. 2 + 3 + 4 = 9.
Troy L Thompson, CFP may be reached at 515-432-5421
or troy@thompsonfinancialinc.com
www.thompsonfinancialinc.com
www.thompsonfinancialinc.com
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Troy Thompson, CFP
DBA Thompson Financial and Hanson Asset Strategies
Securities offered through FIRST HEARTLAND CAPITAL, INC.
Member FINRA & SIPC.
Thompson Financial is not affiliated with FIRST HEARTLAND
CAPITAL, INC.
This
material was prepared by MarketingPro, Inc., and does not necessarily represent
the views of the presenting party, nor their affiliates. The information herein
has been derived from sources believed to be accurate. Please note - investing
involves risk, and past performance is no guarantee of future results.
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1 - wsj.com/market-data
[12/13/19]
2 -
quotes.wsj.com/index/XX/MSCI%20GLOBAL/990300/historical-prices [12/13/19]
3 -
marketwatch.com/story/trump-announces-phase-one-china-trade-deal-and-scraps-dec-15-tariffs-2019-12-13
[12/13/19]
4 -
bloomberg.com/news/articles/2019-12-11/fed-leaves-rates-unchanged-and-forecasts-show-no-change-in-2020
[12/11/19]
5 -
bloomberg.com/news/articles/2019-12-13/u-s-retail-sales-miss-forecasts-for-pickup-as-restaurants-drop
[12/13/19]
CHART CITATIONS:
quotes.wsj.com/index/XX/MSCI%20GLOBAL/990300/historical-prices
[12/13/19]
quotes.wsj.com/index/SPX/historical-prices
[12/13/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
[12/13/19]
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll
[12/13/19]
