Phase-One Trade Deal Reached

Weekly Commentary — December 16th, 2019

The Week on Wall Street

The U.S. and China announced a limited trade agreement last week. That news lifted U.S. and foreign stocks, leading to weekly gains.

Advancing 0.91% on the week, the Nasdaq Composite outperformed the S&P 500 (up 0.73%) and Dow Jones Industrial Average (up 0.43%). The MSCI EAFE index, measuring the performance of developed markets overseas, improved 0.42%.[i],[ii]

Phase-One Trade Deal Reached, December Tariffs Averted

Friday, White House and Chinese officials confirmed an agreement on what has been characterized as an initial step toward a larger trade pact. As a result of this phase-one deal, new U.S. tariffs (slated to go into effect on December 15) were canceled. The 15% tariffs (imposed on $110 billion of Chinese goods in September) now fall to 7.5%.

In return, China commits to buying greater quantities of American crops, factory goods, and energy products.[iii]

Fed Holds Steady on Short-Term Interest Rates

The last Federal Reserve meeting of the year brought no adjustment for the federal funds rate. The vote to leave short-term rates unchanged was unanimous.

After the meeting, Fed chair Jerome Powell told the media, “as long as incoming information about the economy remains broadly consistent with [our] outlook, the current stance of monetary policy will likely remain appropriate.”[iv]

Retail Sales Disappoint

Economists, surveyed by Bloomberg, expected a retail sales gain of 0.5% for November, but according to the Department of Commerce, the advance was only 0.2%. In a bright spot for analysts who wanted to see a strong start to the holiday shopping season, sales at online retailers rose 0.8% last month.[v]

Note: There will be no Weekly Market Update next week, but I will be back on December 30 with a special “Year-in-Review” edition of the WMU. Have a happy holiday season!

 

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The Census Bureau offers a snapshot of November residential construction activity.

Thursday: A look at November existing home sales from the National Association of Realtors.

Friday: November personal spending data and the third estimate of third-quarter economic expansion from the federal government, plus the year’s final University of Michigan Consumer Sentiment Index (which measures consumer confidence levels).

Source: Econoday, December 13, 2019

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: FedEx (FDX)

Wednesday: General Mills (GIS), Micron Technologies (MU), Paychex (PAYX)

Thursday: Accenture (ACN), Nike (NKE)

Friday: CarMax (KMX)

Source: Zacks, December 13, 2019

 

Indices as of 12:13:19

 

“If you think you’re too small to make a difference, try sleeping with a mosquito.”

– Dalai Lama

 

What’s in a Password? 

One of the best ways to keep your data safe online is to have a strong password. The IRS shares some tips on how to create and protect your passwords:

  • Your password should be a minimum of eight characters. The longer, the better.
  • Your password should include a combination of letters, numbers, symbols, and special characters.
  • Don’t include personal information, including names of family members or pets, identifying information about where you live, or other personal details.
  • Don’t use the same password for everything.
  • Substitute special characters and numbers for common letters to make your password more difficult to guess (ex: @ for a, ! for i, 8 for B, etc.).
  • Be aware of scams asking for your password and never tell people your passwords.

If you find yourself forgetting your passwords, a tool like LastPass can help. This tool encrypts your passwords, so they stay safe and can be downloaded on your computer. It will remember your passwords, so you don’t have to.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov[vi]

 

Share the Wealth of Knowledge!
Please share this market update with family, friends, or colleagues.

 

If you have any questions or would like to learn more about developing strategies to pursue a prosperous and safe future, contact me today at Derek.Merkler@Parsonex.com! You can also visit my website to learn about how I help our service members and veterans plan for and achieve financial independence.

My blog discusses a myriad of financial topics and challenges, book reviews, and commentary on current events in the financial world to benefit our military and veteran community.  I attempt to be as thorough as possible when examining each subject but can never account for every possible scenario.  Please remember to consult with your advisers for advice on your particular situation.  Thank you for reading!

Advisory Services offered through Parsonex Advisory Services, Inc. 8310 S. Valley Highway, Ste. 110, Englewood, CO 80112 (303) 662-8700.


[i]https://www.wsj.com/market-data

[ii]https://quotes.wsj.com/index/XX/MSCI%20GLOBAL/990300/historical-prices

[iii]https://www.marketwatch.com/story/trump-announces-phase-one-china-trade-deal-and-scraps-dec-15-tariffs-2019-12-13

[iv]https://www.bloomberg.com/news/articles/2019-12-11/fed-leaves-rates-unchanged-and-forecasts-show-no-change-in-2020

[v]https://www.bloomberg.com/news/articles/2019-12-13/u-s-retail-sales-miss-forecasts-for-pickup-as-restaurants-drop

[vi]https://www.irs.gov/newsroom/strong-passwords-help-keep-tax-data-safe

 

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