The Dow Jones Industrial Average crossed the 28k mark with a close at 28,004.89 on Friday, recording a weekly gain of 1.2%. The S&P 500 closed at 3,120.46 up 0.9% w-o-w. These numbers outline a 6th consecutive week of gains for the index – for the first time in 2 years. Additionally, it’s interesting to notice the lack of direction in the markets on Tuesday, with the Dow closing unchanged to the 10th decimal point for only the 3rd time in the past 19 years.

The US market was once again primarily driven by phase-one China trade deal hopes, although some disagreements arose, namely regarding the extent of China’s commitment to increase purchases of U.S. agricultural products.

Prospects of a near-term recession are increasingly easing, and together with it, some measures of inflation expectations have picked up. The U.S. Federal Reserve Chairman Jerome Powell also remains optimistic that the current monetary policy direction is healthy for the economy as it is now.

Volatility is also calming down, with the VIX approaching sub-12 levels making it hover close to its yearly low.

Retails is picking up ahead of the holiday season with the release of October data pointing to a 0.3% seasonally adjusted gain.


The UK faces further struggles posed by Brexit. It recorded the slowest economic growth in a decade – at 1% in the past quarter. Furthermore, as mentioned last week, Moody’s is no longer optimistic on further prospects for the economy, lowering their rating from stable to negative. This was reflected in the stock market this week, as the FTSE 100 recorded a drop of about 1% to 7,302.94.

The Pound sterling strengthened against the Dollar from 1.27 levels to 1.29.


Europe seems to be closer to the US’ stride. Similarly driven primarily by trade deal hopes, the pan-European STOXX Europe 600 Index gained 0.2% with a close at 406.04, and the exporter-heavy German DAX rose 0.08% to 13,241.75.

However, Germany is still showing struggles. The country’s economy just barely avoided recession with only 0.1% growth in the third quarter. This is mostly due to the manufacturing sector struggling to cope with pressures coming from the trade deal, Brexit, and the disruption of its auto industry.

There haven’t been major changes in EUR/USD – coasting around the 1.10 level throughout the week.


Japan’s Nikkei fell to 23,303.32 – 0.4% on a weekly basis. The government is preparing for lower tax revenues for fiscal 2019 due to weak corporate earnings. These drops in tax revenue are warned to be potentially bigger than the 10% recorded in the first half of the year, which could prompt the government to propose a supplementary budget and issue additional deficit-covering bonds. Additionally, the country is still facing major challenges due to export declines outweighing the positive changes in domestic demand.

Chinese stocks are on a decline as several economic indicators showed a gloomy outlook for the economy. Additionally, trade deal advances don’t seem to be viewed as positively as in the US. The Shanghai Composite Index dropped to 2,891.34 – 2.5% w-o-w, and the large-cap CSI 300 Index, which tracks blue chips listed on the Shanghai and Shenzhen exchanges, fell by 2.4% to 3,877.09.

While oil experienced some swings during the week, both the WTI and the Brent closed at similar levels as at the end of last week – 57.72 for the WTI & 63.30 for the Brent.



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