US stocks hit new record highs driven by earnings news, the signing of the partial trade agreement between the US and China and positive economic news. The S&P 500 surged 2.0%, while the Dow climbed 1.8%. Abroad, the FTSE All-World Ex-US rose 1.0% for the week. The 10-year Treasury yield eased over the week to end at 1.83%.
Companies are projected to report a fourth-quarter earnings decline of 2.4% from a year earlier which would make it the 4th straight quarter of earnings declines. Large banks have reported strong fourth-quarter earnings driving optimism early in earnings season.
Germany’s growth hit a six-year low in 2019 growing at 0.6% dragged down from weakness in the manufacturing sector.
The US and China signed the phase one deal which represents a truce in the two-year trade war, with roughly $370 billion in tariffs remain on Chinese goods.
Retail spending rose 0.3% in December and excluding autos and gas rose 0.5%, the best pace in five months.
In December the construction of new homes in the US rose to their highest level since 2006.
Chinese industrial production grew 6.9% in December outpacing estimates and posting the fastest expansion in nine months. Economic growth eased to 6.1% in China for the year, but it was in line with expectations.