U.S. – China Trade Talk Optimism Pushes Stocks Higher02-19-2019 |
Sources: Sources for data in tables: Equity Market and Fixed Income returns are from JP Morgan as of 02/15/19. Rates and Economic Calendar Data from Bloomberg as of 02/18/19. International developed markets measured by the MSCI EAFE Index, emerging markets measured by the MSCI EM Index. Sector performance is measured using GICS methodology.
U.S. equities continued their 2019 ascent last week. The Dow Jones Industrial Average and S&P 500 Index advanced 3.21% and 2.56% respectively for the week. Those returns mark the eighth consecutive weekly gain for the Dow and gains in seven out of the last eight weeks for the S&P 500 Index. U.S. Small Cap stocks, as measured by the Russell 2000 Index, continued to lead the way in 2019 posting a positive 4.22% return. The group is up 16.52% year-to-date. Looking overseas, international equities were mixed between developed and emerging markets with a 2.04% gain and a 0.49% loss respectively. Finally, the 10-year U.S. Treasury continued to trade in a tight range this year closing the week with a 2.66% yield.
During the week we continued to see our fair share of positive and negative signals. Global economic growth continues to be a concern as the U.K.’s economic growth weakened, industrial production in the Eurozone fell more than anticipated in December, and U.S. retail sales dropped in December. Despite these headwinds, the market was resilient thanks to optimism throughout the week regarding U.S. and China trade negotiations. Negotiations will continue this week back in Washington D.C. though no near-term, final agreement is expected at this time.
Markets reopened this week on Tuesday after the long President’s Day weekend. Stocks struggled to find direction during early trading as investors looked to balance any trade/tariff news with additional corporate earnings reports. With respect to the latter, Walmart shares jumped as the large retailer beat analyst Q4 expectations on both the top and bottom lines, hinting that the U.S. consumer is still in pretty good shape.
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