Equities in the US started the week off on a bad note which was propelled by trade sentiment deteriorating between the US and China, the US equity markets plunged as much as 3% in the Nasdaq in the first two days of the week before finding their footing. President Trump made his way to the UK to meet with NATO leaders and he mentioned that he does not think a deal would be reached between China and the US in 2019 and maybe not until after the 2020 election. As foreshadowed by a surprise South American tariff announcement Monday, he struck a more contentious tone while meeting with NATO officials, which included new tariffs on French products in retaliation for the expected digital tax.

It was a classic case of back and forth, taking things back or saying the complete opposite to appease markets yet again. Midweek there was more constructive commentary from the President about the current deal in question. Hong Kong was the focus of attention as expected but the sides remained optimistic about getting to a Phase 1 deal before Trump December 15th tariff decision.

The end of the week is what saved the markets week from complete disaster, NFP numbers came out with a huge beat on most accounts. Nevertheless, risk assets continued to run up, affording US stock markets to move back into positive territory for the week. Oil prices held near multi-month highs as producers were able to cobble together an agreement to remove an additional 500K BPD when they met in Vienna. Rates finished the week near a one-month high and the US Treasury curve steepened in the wake of the Nov jobs report.

Here is a look at last week’s stock market on a daily basis (red vertical lines split days).

Stock Market and Sector Overview

Here is a break down of the weekly performance in various stock market sectors (top chart):

  • Energy  0.93%
  • Technology  -0.37%
  • Financials  0.65%
  • Retail  0.39%
  • Utilities  0.77%

Overview of key markets last week (bottom chart):

  • Crude Oil 1.74%
  • S&P500  -0.17%
  • Silver  -1.72%
  • Gold  -0.16%
  • US dollar -0.65%

Weekly Economic Calendar.

A heavier week in high impact economic events coming up as we have large rate decisions out of the US & other central banks and UK parliament elections.

Monday, Australia’s Governor Lowe speaks.

Tuesday, GDP numbers out of the UK.

Wednesday, new loans out of China, CPI data out of the US, and the FOMC’s rate decision, press conference, and statement are all set to be announced.

Thursday, SNB monetary policy assessment, Parliamentary elections out of the UK, SNB press conference. ECB monetary policy statement and rate decision. The day ends with Governor Poloz speaking out of BOC.

Friday, retail sales data out of the US.

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