The Market Week in Review

The U.S. stock market ended the week largely higher after China said they have agreed with the U.S. to cancel opposing tariffs in phases.  Consequently, interest rates also moved higher as the 10-year treasury yield rose from 1.73% to 1.94%.  The spread between the 10-year treasury yield and the 2-year treasury also continued to widen after inverting in August of this year as it currently sits at 0.26%.  The price of gold also dropped on the news of the U.S. and China potentially reaching a trade deal, dropping 3.8% to $1,459 an ounce.  Meanwhile, the price of crude oil rose 2.0% to $57.39 a barrel as it also received support from the U.S. and China trade talks.

This Week's Economic Highlights

  • The U.S. trade deficit narrowed by 4.7% in September, reaching a five-month low of $52.5 billion. The drop in the trade deficit was supported by U.S. oil exports exceeding imports (i.e. oil surplus) for the first time since 1978.  Additionally, the U.S. trade deficit in goods with China has fallen 13.4% so far this year, as the trade war makes its mark.

  • The ISM non-manufacturing index, a measure of service-orientated businesses, bounced off its three-year low of 52.6% in September to 54.7% in October. (Any reading above 50% is considered improving business conditions.)

  • Initial unemployment claims fell by 8,000 for the week ending November 2nd to a total of 211,000. However, the more stable four-week average of initial claims only rose by 250 to a total of 215,250.  Continuing unemployment claims, which lags initial claims by a week, fell by a marginal 3,000 to a total of 1.69 million.

Quote

“The intelligent investor is a realist who sells to optimists and buys from pessimists.”

     – Benjamin Graham

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