China trade deal remains top of mind

Market Recap week ending 11/22/2019

Markets took a small step back last week as the US / China trade continued to be top of mind for investors.  Various headlines throughout the week suggested the two sides were still far apart on a deal.  The US Senate’s passing of the Hong Kong Human Rights and Democracy Act seemed to complicate matters further.  Another tranche of tariffs is set to take effect on December 15th if the two sides cannot come to an interim agreement.  The S&P 500 lost -0.33% for the week, with the other major averages losing about the same.  The Dow fell -0.46% the NASDAQ shed -0.25%, and the Russell 2000 gave up -0.47%.  US Treasuries were mixed last week as the yield curve slightly flattened.  The 2-year note yield increased two basis points to 1.63% while the 10-year bond yield decreased by six basis points to close at 1.77%.  Gold was little changed on the week, losing just over $4 to close at $1463.60 and oz.  Oil gained 0.2% on the week to close at $57.88.  There were no changes to the models last week. 

Of note, there were a few retailers that reported last week that provided a mixed picture into the health of the consumer.  Home Depot and Kohl’s disappointed investors while Nordstrom and Target beat expectations.  Additionally, the final reading for November of the University of Michigan’s
Consumer Sentiment was better than expected.  It came in at 96.8 versus expectations of 94.9 and better than the preliminary reading of 95.5.  US Markit Manufacturing PMI was also reported last week and was better than expected at 52.2 and up from the October reading of 51.3.  Services PMI came in at 51.6, also better than the prior months reading of 50.6.  

Darren Leavitt, CFA Portfolio Manager & Sr. Market Analyst