Monday, December 23, 2019

S&P500 makes biggest weekly gain since early September as consumer spending beats expectations

Tags
  • Dollar
  • Gold
  • Pound
  • Stocks

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US equities made new record highs on Friday after consumer spending data beat economists' expectations and as investors continued to be optimistic about the US-China phase one trade deal. The Nasdaq ended Friday with its eighth straight day of gains.

Indexes Change (%) Net Change Closing Price
Dow Jones 0.28 78.13 28,455.09
S&P500 0.49 15.85 3,221.22
Nasdaq 0.42 37.74 8,924.96
*Source: Bloomberg

US major indices jumped over the past week thanks to investor optimism for a phase one trade deal between the US and China. The S&P500 hit its biggest weekly gain since early September, spiking 1.65% over the week.

Indexes Weekly return Weekly Change Closing Price
Dow Jones 1.14 319.71 28,455.09
S&P500 1.65 52.42 3,221.22
Nasdaq 2.18 190.08 8,924.96
FTSE100 3.11 229.04 7,582.48
Nikkei -0.86 -206.47 23,816.63
Hang Seng 0.66 183.59 27,871.35
Straits Times -0.05 -1.66 3,212.39
*Source: Bloomberg

The Dollar Index gained thanks to the robust consumer spending data as well. Personal Consumption for Q3 was revised up to 3.2% from a previous estimate of 2.9%. Both PCE and core PCE beat economists' forecasts, rising to 1.5% and 1.6% for November respectively. Sterling continues to face downward pressure from the prospects of a no-deal Brexit, falling just below 1.3000 against the dollar on Friday.

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Safe haven assets were mixed on Friday, with gold rising while the yen fell against the dollar. But investors look set to move out of risk adverse assets on Monday morning after US President Donald Trump said on Saturday that the US and China would be signing the phase one agreement very soon after a breakthrough on the trade deal. Gold was 0.17% lower and the yen was 0.02% weaker against the greenback on Monday morning as of 8.46am. US Treasuries ended Friday mostly flat.

Safe Haven Assets Change (%) Net Change Closing Price
Gold 0.19 2.84 1,481.64
JPY -0.06 -0.07 109.44
*Source: Bloomberg
US Treasury yields Change (bps) Yield (%)
2-Year 0 1.63
10-Year 0 1.92
30-Year -1 2.34
*Source: Bloomberg

Stocks in Asia started Monday's trading session higher ahead of the Christmas holiday break on Thursday and as we approach January 2020 when the US and China will supposedly sign their phase one trade deal. The Nikkei, KOSPI and Straits Times Index opened the day 0.44% , 0.18% and 0.13% higher although the Straits Times Index inched lower later in the morning. US equity futures were also slightly higher on Monday morning.

Asia Change (%) Net Change Last Price As of (GMT +8)
Nikkei Index 0.19 44.16 23,860.79 8:23:05 AM
Straits Times Index -0.02 -0.70 3,211.40 9:15:14 AM
Hang Seng Futures 0.03 9.00 27,949.00 2:59:56 AM
*Source: Bloomberg
US Futures Change (%) Net Change Last Price As of (GMT +8)
Dow Futures 0.01 3.00 28,486.00 8:47:36 AM
S&P500 Futures 0.03 1.00 3,226.75 8:47:34 AM
Nasdaq Futures 0.09 7.75 8,718.25 8:47:34 AM
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Important macro events this week will be the release of November’s durable goods orders and new home sales in the US, and the BoJ’s meeting minutes for its October monetary policy meeting. British Prime Minister Boris Johnson is expected to attempt to push the Brexit legislation through parliament today with his Conservative Party majority in the Commons. This week will be a relatively quiet week for traders, as most major exchanges will be closed on December 25th for Christmas.