Market Update - December 3, 2019Submitted by Jodi Vleck , Beta Wealth Group on December 2nd, 2019
For the week ended 11/30, U.S. stocks ticked higher as optimism over a 'Phase One' trade deal looked increasingly promising, which drove several equity indexes to new highs albeit during a low-volume holiday week. Technology stocks performed well alongside improved China sentiment, the Consumer Discretionary sector led the way with decent early retail numbers for the holiday season while energy stocks declined in keeping with lower prices for crude oil. Further, the broader real estate sector fared well with gains approaching 2% in the U.S. and a percent internationally, as interest rates remained stuck in a range. On the economic front, we had generally stronger data including upward revisions for Q3 GDP, stronger durable goods orders and lower jobless claims.
Foreign equities gained as well, albeit to a lesser degree than domestic equities, with strength in Europe and the U.K. offsetting declines in Japanese equities; it is worth nothing that despite continued close ties to trade negotiations, European market sentiment continues to see improvement from bottoming levels. Emerging markets were mixed with countries sensitive to lower oil prices generally experiencing a poorer stretch; in addition, protests in several South American nations negatively impacted market sentiment.
U.S. bonds were little changed on the week, with the yield curve up by only a few basis points. Long duration government bonds and the high yield sector generated slightly higher returns slightly than broader bond market indexes, foreign developed market bonds were little changed while emerging market local bonds lost nearly a percent. Finally, commodities generally lost ground being weighed down by weakness in the energy complex as the price of crude oil fell by over 4% to just over $55/barrel, while there was a 15% correction in natural gas prices due to forecasts for warmer weather ahead.