Financial News and Portfolio Management Discussion through January 18th

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.


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