Market Insights 1/15/2020

U.S. stocks were higher today as the U.S. and China signed a highly-anticipated “phase one” trade agreement.

Treasury yields were lower and took the U.S. dollar with them. Crude oil fell on the day, while gold rallied.

The Markets…

The Dow Jones Industrial Average was up 91 points (0.3%) to 29,030

The S&P 500 rose 6 points (0.2%) to 3,289

The NASDAQ rose 7 points (0.1%) to 9,259

Volume was average with 872 million shares were traded on the NYSE and 2.4 billion shares changed hands on the NASDAQ

WTI oil fell $0.42 to $57.81 per barrel and wholesale gasoline shed $0.02 to $1.64 per gallon

The Bloomberg gold spot price rose $9.40 to $1,554.00 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—shed 0.2% to 97.22

Wholesale price inflation mostly cooler than expected, mortgage apps jump

The Producer Price Index (PPI) showed prices at the wholesale level in December ticked 0.1% higher month-over-month, below the forecast calling for a 0.2% gain and versus November’s unrevised flat reading. The core rate, which excludes food and energy, also gained 0.1% m/m, versus an expected 0.2% increase and November’s unadjusted 0.2% decline. Y/Y.

The MBA Mortgage Application Index rose sharply by 30.2% last week, following the prior week’s 13.5% gain. The jump came as a 42.7% surge in the Refinance Index was met with a 15.5% gain for the Purchase Index. The average 30-year mortgage rate fell 4 basis points to 3.87%.

Treasuries were higher, with the yield on the 2-year note dipping 1 bp to 1.56%, while the yields on the 10-year note and the 30-year bond declining 3 bps to 1.78% and 2.24%, respectively.

Tomorrow will offer some key data on the U.S. consumer. December Retail Sales are expected to show a healthy 0.3% increase over November with sales ex-autos increasing 0.5% month-over-month. The Bloomberg Consumer Comfort Index will also be released after setting a 19-year high last week.

Mixed day for global markets

European equities finished mixed. The Bank of England may be leaning toward a rate cut later this month, following another dose of subdued inflation statistics. The British pound fell versus the U.S. dollar. The euro traded higher versus the greenback and bond yields in the region were lower.

The U.K. FTSE 100 Index was up 0.2%, Switzerland’s Swiss Market Index ticked 0.1% higher, France’s CAC-40 Index was down 0.1%, Germany’s DAX Index and Spain’s IBEX 35 Index decreased 0.2%, and Italy’s FTSE MIB Index fell 0.8%.

Stocks in Asia finished mostly lower. Japan’s Nikkei 225 Index declined 0.5%, with the yen nudging higher and a report showing the nation’s machine tool orders continued to drop in December. China’s Shanghai Composite Index decreased 0.5% and the Hong Kong Hang Seng Index traded 0.4% to the downside.

South Korea’s Kospi Index descended 0.4% and India’s S&P BSE Sensex 30 Index moved 0.2% to the downside ahead of data after the closing bell that showed the country’s exports declined last month. Australia’s S&P/ASX 200 Index bucked the trend, rising 0.5% with most major sectors gaining ground.