The Federal Reserve and European Central Bank both pledged to do what they could to reinforce their respective economies. The United Kingdom gave Boris Johnson’s Conservative Party a landslide victory, virtually guaranteeing that the Brexit saga will end, finally. And on Friday, President Trump announced that a phase one deal with China had been completed and that negotiations on phase two would begin immediately. Rumors of a deal on Thursday sent the Dow up over 220 points. For the week, the Dow Jones Industrial Average finished up 120.32 points, or 0.4%, at 28,135.38. The S&P 500 index gained 0.7%, to 3,168.80 and the Nasdaq Composite climbed 0.9%, to 8,734.88.
While questions still remain on the details, the U.S. and China agreed to an initial deal whereby U.S. tariffs on Chinese goods were rolled back and new ones were cancelled in exchange for some concessions by China, including a yet to be determined import of U.S. agricultural products. The House of Representatives also supported a bi-partisan revised NAFTA 2.0 trade pact. As for stocks, all but the now more volatile telecommunications group were positive. Technology led the pack with a gain of 1.26% followed by energy and basic materials, each with gains of 0.9%. Other trade related sectors were also in the green including industrials and consumer goods. Safe-have utilities, REITS and health cares stocks, while positive, lagged its industry peers.
The Fed opted to hold the line on further rate reductions at its FOMC meeting early in the week. The strong November jobs report likely reassured the central bank that it was on the right track regarding monetary policy. Such rate stability should help underpin equities, suggesting that there will be opportunities for nimble investors, even in a market that is already rather pricey. Hence, investors should stay the course, as we approach the holiday season and the New Year.
Here is the answer to last week’s trivia question: Philip Morris split into two companies in 2003: Altria and Philip Morris International. Philip Morris International retained its headquarters in New York City and Altria moved its NYC base to? Raleigh, NC, Fredericksburg, VA, Winston-Salem, NC, or Richmond, VA. Answer: Richmond, Virginia
Today’s Trivia Question: The 2019 year-over-year rise in online Black Friday sales to $7.4 billion was an increase of? 12.1%, 14.7%, 19.6% or 21.0%.