Market Insights 11/29/2019

U.S. stocks declined today but posted another solid weekly advance, which was the seventh out of eight.

Lingering optimism of a U.S.-China “phase one” trade deal, which was a main catalyst for this week’s rally, was challenged somewhat by the U.S. signing legislation in support of Hong Kong protestor’s.

Treasury yields were mixed and gold was higher, while the U.S. dollar turned lower and crude oil prices fell, with the economic calendar dormant and equity news light.

The Markets…

The Dow Jones Industrial Average declined 113 points (0.4%) to 28,051

The S&P 500 Index decreased 13 points (0.4%) to 3,141

The Nasdaq Composite slid 40 points (0.5%) to 8,665

In light volume, 496 million shares were traded on the NYSE and 1.1 billion shares changed hands on the Nasdaq

WTI crude oil lost $2.52 to $55.59 per barrel and wholesale gasoline shed $0.08 to $1.60 per gallon

The Bloomberg gold spot price was $9.03 higher at $1,464.63 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—dipped 0.1% to 98.25

Markets got back into the green for the week, as the DJIA rose 0.6%, the S&P 500 Index advanced 1.0%, and the Nasdaq Composite gained 1.7%

Treasury yields mixed and economic calendar dormant in a half day for the markets

Treasuries finished mixed as the economic calendar was void of any major releases today, with the yield on the 2-year note declining 2 basis points to 1.60%, though the yields on the 10-year note and the 30-year bond ticked 1 bp higher to 1.77% and 2.20%, respectively.

Next week, when the markets return to full strength, the economic calendar will remain in high gear, with key reports that could garner attention being: ISM and Markit November manufacturing and non-manufacturing reports, jobless claims, factory orders and the preliminary December University of Michigan’s Consumer Sentiment Index.

However, with the health of the consumer keeping recession concerns in check, Friday’s November non-farm payroll report has the potential to be the biggest driver of market direction for the week, which will come days before the Fed’s final monetary policy decision of the year on December 11th.

Europe mostly lower on trade and data

European equities finished mostly lower, with the U.S. markets dipping in a return from a holiday break, while the euro and British pound reversed slightly higher versus the U.S. dollar.

Optimism of an agreement between the world’s two largest economies has driven the global equity markets higher recently, notably the string of all-time highs in the U.S. The economic calendar was relatively busy, with German retail sales surprisingly falling in October but the nation’s unemployment change for November unexpectedly declined.

The U.K. FTSE 100 Index was down 0.9%, Germany’s DAX Index, France’s CAC-40 Index and Spain’s IBEX 35 Index dipped 0.1%, Italy’s FTSE MIB Index declined 0.4%, and Switzerland’s Swiss Market Index decreased 0.3%.

Asia lower following data and as trade tensions flare-up

Stocks in Asia finished lower, with the markets digesting some soft economic data out of Japan and as U.S.-China trade tensions appear to be flaring up. Following a larger-than-expected drop in Japanese October retail sales reported late-Wednesday, the nation reported that its industrial production for last month dropped 1.7% m/m, much larger than the 0.3% dip that was anticipated.

The Hong Kong Hang Seng Index dropped 2.0% to lead the downside move, and China’s Shanghai Composite Index decreased 0.6%. Japan’s Nikkei 225 Index declined 0.5% following the data and as the yen briefly gained some ground late in the session. South Korea’s Kospi Index dropped 1.5%, while the Bank of Korea kept its benchmark interest rate unchanged. Australia’s S&P/ASX 200 Index traded 0.3% lower and India’s S&P BSE Sensex 30 Index moved 0.8% to the downside.