Financial News and Portfolio Management Discussion through December 13th

Global stocks posted strong gains on an initial trade agreement reached between the US and China, comments after the Fed’s December meeting and more clarity on the direction of the UK after Prime Minister Johnson’s decisive win.  The S&P 500 was up 0.8%, a record high, while the Dow gained 0.5% for the week.  Abroad, the FTSE All-World Ex-US rose 2.2% for the week.  The 10-year Treasury yield ticked down slightly to end the week at 1.82%.

The US and China agreed to a limited trade deal that will reduce existing tariffs on Chinese goods and cancel new tariffs that would have taken effect on the 15th, while China will increase purchases of US farm goods by $32 billion, increase intellectual property protection, open the Chinese financial services market and prevent currency manipulation.  The US will cut the tariff rate on roughly $120 billion of Chinese goods from 15% to 7.5%.

The President and Congress agreed on a trade deal between the US, Canada, and Mexico setting up passage early next year.

Inflation remained subdued in November as the CPI rose at a 2.1% annual rate up from 1.8% in October.

The Fed announced, at the conclusion to their last meeting of the year, that they were holding rates steady for the time being.  The rate-setting body currently expects to leave the Fed Funds rate unchanged in 2020.

The ECB held rates steady in new chief Lagarde’s first meeting as she detected “some initial signs of stabilization” in eurozone growth.



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