After last week’s rising tensions in the Middle East, this week, investors received some much needed closure on another issue that has been plaguing the markets for quite some time. We’re talking about the trade war between the U.S. and China. The week marked the official signing and agreement on the so-called Phase One deal between the two nations. While the market already lurched higher on the announcement that a deal was struck, the physical signatures and other moves continued to send stocks higher.
Also helping was generally positive economic data. A variety of key inflation measures ticked higher over the last month, while several regional manufacturing indices saw a return to positive and expansionary conditions. The consumer economy remains bullish as well, with retail sales jumping much higher during the critical holiday spending period. A generally bullish tone from several Federal Reserve governor speeches also helped moved the markets higher.
Investors also received some good earnings numbers this week. The start to the earnings season blitzkrieg began with several key banks reporting good numbers. While there were a few key hiccups across several other sector bellwethers, the general guidance for the quarter was positive. With the trade war ending, many firms have become more bullish on the prospects in the new year.
All in all, the signing of the trade deal managed to keep stocks rising and hitting new records during the week.
Be sure to check out our previous Wrap here, when new tensions hit stocks.
