Market Reports

Five Minute Macro 12-16-2019

#1 US-China Trade Détente / USMCA Resolution

Last Week: #2

  • After weeks of mixed messages from US and Chinese officials over the state of negotiations, both sides affirmed on Friday that a Phase One deal has been reached, although some final terms need to be rectified.
  • The US agreed to partial removal of existing tariffs on Chinese imports and cancellation of scheduled duty increases consumer-facing products. But the White House will retain some tariffs as leverage in the Phase Two talks, though investors suspect that no additional agreement is likely before the November 2020 elections. China agreed to some degree of increased US farm imports. Enforcement procedures are also said to be included, alongside intellectual property, structural reforms, and currency policy terms.
  • Also, Congress is expected to pass the US-Mexico-Canada trade agreement this week.

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Morning Markets Brief 12-13-2019

Summary and Price Action Rundown

Global risk assets posted robust gains overnight as headlines indicate impending resolution of the Phase One US-China trade deal and the decisive Conservative win in yesterday’s UK election cleared the path for an orderly Brexit. S&P 500 futures point to a 0.4% higher open, which would add to yesterday’s 0.9% gain and set a new record peak for the index.

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Afternoon Markets Brief – 12/6/19

Summary and Price Action Rundown

The S&P 500 posted a strong rally today to end a mixed week of trading on a positive note after US nonfarm payrolls for November registered a significant upside surprise. US equities nearly recaptured last Wednesday’s record high after better-than-expected labor market data brightened investors’ growth outlook. Asian and EU stocks also advanced overnight. Continue reading “Afternoon Markets Brief – 12/6/19”

Looking Ahead – 12/6/19

Just OK is Not OK

Today’s highly-anticipated nonfarm payroll report featured a blockbuster number of 266k new jobs, handily topping an estimate of 183k and giving the many traders who were playing for a mildly disappointing reading a case of whiplash. But the reflexive selloff in Treasury markets settled down quickly and futures markets are still projecting that the Fed will be back cutting interest rates in the second half of next year. That bond market price action is consistent with a pretty sober outlook for growth in 2020, which matches the broad consensus among economists that US GDP is going to soften modestly to 1.8% from this year’s 2.3%. Continue reading “Looking Ahead – 12/6/19”