Daily Insights

Trade continues to lead headlines.TheS&P 500 Indexis set to open modestly lower amid concerns of impending December tariffs as investors continue to watch trade developments. Overnight, a Chinese commerce official told reporters that China hopes it can reach a trade agreement with the United States that satisfies all sides “as soon as possible,” as China’s exports unexpectedly dropped 1.1% in November year over year,  and Chinese shipments to the U.S. fell by 23%.Meanwhile, White House economic adviser Larry Kudlow reiterated that the U.S. and China are “close” to a trade deal. The removal of the U.S.’s existing tariffs, China’s meaningful purchase of agricultural products, and recent complications concerning the U.S.’s legislation on Hong Kong are key near-term stumbling blocks. However, consensus expectations revolve around a near-term phase-one trade deal.

Federal Reserve set for a pause.TheFederal Open Market Committeeis set to meet December 10 and 11. TheFederal Reserve (Fed)lowered the fed funds rate by 0.25% in each of the past three meetings to provide a cushion for the U.S. economy while a broader global slowdown continued. However, amid Friday’s better than expected jobs report and recent data highlighting that inflation remains muted, the Fed is likely to leave rates unchanged.

U.S. economy ambles along.U.S. economic growth has slowed in 2019, but it’s still growing. In this week’sWeekly Market Commentary:  Ambling Along in 2020, we look at factors impacting the economy now and the trends we expect to continue in 2020.

Jobs report sparked late-week rally. The S&P 500 eked out a small weekly gain last week thanks to Friday’s rally on the November jobs report. TheRussell 2000 Indexof small caps led U.S. index returns for the second straight week, and long-term yields bounced back. Oil prices reached their highest level since the September attacks on Saudi Arabia’s oil facilities. Read theWeekly Market Performance: Jobs Report Sparks Rallyfor a complete summary of major index performance.

Week ahead.This week, the U.S. economic calendar will bring data on small business confidence and productivity on Tuesday, the Fed’s policy announcement on Wednesday, consumer and producer inflation on Wednesday and Thursday, andretail salesdata on Friday. Internationally, investors will be watching for Japanesegross domestic product, German trade data, and China inflation data on Monday. The United Kingdom’s general election and theEuropean Central Bankmeeting are scheduled on Thursday, when investors will also get a look at Eurozoneindustrial production.

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