Market Insights 1/14/2020

Stocks around the globe posted a mixed day of performance ahead of tomorrow’s expected signing of a “phase one” trade deal by the U.S. and China.

Q4 earnings season unofficially began with the major banks kicking it off. JPMorgan Chase & Co and Citigroup posted good results, but Wells Fargo saw some pressure after missing expectations.

Treasuries were higher, but the lower yields didn’t prevent the dollar from gaining ground. Gold lost modest ground. Crude oil prices were higher.

The Markets..

The Dow Jones Industrial Average added 33 points (0.1%) to 28,940

The S&P 500 shed 5 points (0.2%) to 3,283

The NASDAQ was down 23 points (0.2%) to 9,251

Volume was brisk with 916 million shares were traded on the NYSE and 2.5 billion shares changed hands on the NASDAQ

WTI oil added $0.15 to $58.23 per barrel and wholesale gasoline was flat at $1.65 per gallon

The Bloomberg gold spot price fell $6.00 to $1,544.60 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was flat at 97.38

Consumer price inflation slightly cooler than expected, small business optimism dips

The Consumer Price Index (CPI) rose 0.2% month-over-month in December, below the Bloomberg estimate calling for a match of November’s unrevised 0.3% gain. The core rate, which strips out food and energy, was 0.1% higher m/m, south of expectations to match November’s unadjusted 0.2% rise. Y/Y, prices were 2.3% higher for the headline rate, below forecasts calling for a 2.4% gain and compared to November’s unadjusted 2.1% increase.

The National Federation of Independent Business (NFIB) Small Business Optimism Index for December declined to 102.7, from November’s unrevised 104.7 level, and compared to expectations of a slight dip to 104.6. 25% of employers think it is a good time to expand, and the net percentage of firms expecting a better economy, anticipating higher selling prices and better sales all increased, while the net percentage of employers anticipating job creation fell.

Treasuries were higher, with the yield on the 2-year note down 2 basis points (bps) to 1.57%, the yield on the 10-year note dropping 4 bps to 1.81%, and the 30-year bond rate declining 3 bps to 2.27%.

Tomorrow will bring more inflation data from the Producer Pricing Index (PPI), which is expect to show a subdued, 1.3% year-over-year increase. The Empire Manufacturing survey is expected to show expansion and MBA Mortgage Applications will be released.

Europe mixed ahead of U.S.-China trade signing and as earnings season heats up

Global equities finished mixed, despite the global markets anticipating tomorrow’s signing of a “phase one” trade deal between the U.S. and China and some upbeat December trade data out of China. The euro declined versus the U.S. dollar, and the British pound paused from a recent decline that has come from some soft economic data and continued dovishness from members of the Bank of England.

The U.K. FTSE 100 Index, France’s CAC-40 Index and Italy’s FTSE MIB Index ticked 0.1% higher, Germany’s DAX Index was little changed, Spain’s IBEX 35 Index declined 0.2%, and Switzerland’s Swiss Market Index gained 0.3%.

Japan’s Nikkei 225 Index rose 0.7% in a return to action following yesterday’s holiday break, with the yen losing some ground, while Australia’s S&P/ASX 200 Index advanced 0.9%. South Korea’s Kospi Index moved 0.4% higher and India’s S&P BSE Sensex 30 Index nudged 0.2% higher. China’s Shanghai Composite Index declined 0.3% and the Hong Kong Hang Seng Index dipped 0.2%.