US Equity Markets snapped their six-week winning streak last week, though were only down slightly as reports surfaced that the hoped-for "Phase One" trade agreement between the US and China may not be completed this year. While extensions are possible, the next deadline for additional tariffs to go into effect is December 15th. The S&P 500 dropped 0.3% for the week to bring its gains for the year to 24.1%. The Nasdaq also fell 0.3% for the week and is now up 28.4% for the year, while the Russell 2000 (small-cap stocks) declined 0.5% for the week to lower its gains for the year to 17.8%.
Global equity markets fell last week amid the trade issues and disappointing economic data out of Europe, as the UK data shows economic contraction and German data suggest a flat economy. As a result, Developed Markets declined 0.6% for the week to bring its gains for the year to 14.8%. After a poor prior week, Emerging Markets were actually flat for the week, only down 0.02%. For the year, Emerging Markets are up 8.6%.
US Interest Rates dropped again last week in light of the recent US-China trade reports. The yield on the 10-Year US Treasury fell to 1.77% last week from 1.84% the prior week. The yield on the US 2-Year Treasury closed the week at 1.63%, resulting in a continued positive yield curve of 0.14%.
Of Interest to Us
Manufacturing has been a primary area of global economic concern in light of the trade issues, yet key metrics of global manufacturing activity have begun to improve. While still in "contractionary" territory the Purchasing Managers Index (PMI's), which measures manufacturing activity, improved in both Europe and Japan in October, while a preliminary US PMI measure for November moved higher for the third consecutive month.
Market Data
for the week ending 11/22/2019
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