Weekly Market Review

Equities fell on news of a coronavirus outbreak in China, with confirmed cases later in the surrounding region in addition to the US, Canada, France, and Australia.

After nearly two years of negotiations, the US and China signed a partial trade deal known as “Phase One.” The US agreed to cut the tariff rate from 15% to 7.5% on $120 billion of Chinese goods while backing off on further increases; $250 billion (roughly half) are still at the higher 25% tariff rate.

Trump announced that he will be signing the Phase One deal with China on January 15. China state-sponsored media has reaffirmed that Phase One is in the final stage of the timeline but cautioned the delicacy of the situation

What a strange and eventful 2019. Unlike the December 2018 equity drawdown, 2019 was able to keep its gains with the S&P 500 returning above 31%. All broad equity indices finished strongly positive with the US leading international markets.

The House passed the US-Mexico-Canada (USMCA) trade deal which is expected to pass the Senate at the start of 2020.[1] It’s a positive development that trading partners are coming together rather than apart, but the economic impact leaves much unchanged from the prior NAFTA agreement.

To no surprise, the Fed decided to leave interest rates unchanged. The committee continues to recognize sustained economic expansion and strong labor markets, but lingering concerns are business investment, exports, and subpar inflation.