Weekly Market Roundup
November 18, 2019
Start your week off right with our market snapshot and data visualization from the Global Economics and Investment Analysis Group.
- Global stocks were up +0.4% in the latest week on continued expectations of a U.S.-China trade deal with rollback of tariffs.
- Emerging markets (-1.5%) underperformed developed markets (+0.7%) on continued weak global economic data and Hong Kong protests.
- U.S. large caps (+0.9%) had their sixth consecutive weekly gain (longest streak in two years) and outperformed small caps (-0.1%).
- Europe overall was unchanged; France led the region’s gains (+0.8%).
- U.S. corporate credit spreads (U.S. HY +10 bp; U.S. IG +1 bp) widened.
- U.S. Treasuries gained, driving yields lower (U.S. 10-year closed the week at 1.83%; 2-year yield at 1.61%).
- The U.S. dollar index lost (-0.4%) against other major currencies.
- U.S. October headline CPI of +0.4% m/m beat consensus and the +1.8% y/y rate was higher than September's report of +1.7%.
- U.S. October retail sales went up +0.3% (+3.1% y/y), beating expectations and better than September’s -0.3%. Autos came stronger than expected.
- China activity data came weaker than expected: Industrial production rose +4.7% y/y compared to +5.8% in prior month. Fixed asset investment expanded +5.2% y/y YTD (record-low reading) vs prior +5.4%.
- U.S. FOMC Minutes (Wednesday)
- Eurozone Consumer Confidence (Thursday)
- U.S. Leading Indicators (Thursday)
- Japan CPI (Thursday)
- Eurozone Markit Composite PMI (Friday)
- U.S. Markit Composite PMI (Friday)
Monthly Market Roundup
Positive Sentiment Supports Risk Assets
- Increased risk appetite in October supported equities as global stocks gained 2.8%, the best month since June.
- Global central bank easing, a softer dollar, and anticipation of a “phase one” skinny trade deal between the US and China supported sentiment.
- While global growth momentum continues to weaken, there are some signs of stabilization.
- The outperformance of value, Europe, Japan, banks, US small caps, US yield curve steepening, and higher sovereign bond yields also highlights markets pricing in a cyclical bottom.
Monthly Market Roundup Podcast
Presented by Lale Akoner,
Points of View
Government Bonds: Why we expect yields to edge higher…
Our forecasts for yields still imply a market that is too pessimistic and lowered its estimates too far. Hence, we see a higher probability of an upward drift in yields as growth stabilizes in 2020.
U.S. Treasuries: Why we think recession fears are unjustified
Given dramatic moves in risk markets, we provide a brief update of what we think markets are currently pricing in along with implications for investing.