Markets Near All Time High on Trade Hope and Brexit Progress in the Weekly Market Update by Valeo Financial Advisors (October 26, 2019)
October 26, 2019    Disclosures    POSTED IN  InvestmentsEconomyMarkets

This week, President Trump announced the sanctions that were imposed against Turkey for attacks on Kurdish allies have been lifted, this came after reports that the Syrian cease fire was going to be permanent. The U.S. Trade Representative said, the U.S. and China have come close to finalizing the first parts of deal. A Brexit agreement was finally pushed through the House of Commons on Tuesday, but a second vote regarding the timeline did not. French President, Emmanuel Macron, took this outcome and blocked the EU’s attempt to delay Brexit for three months. The intention is to put pressure on the House of Commons to back Boris Johnson’s deal and act, but this could increase the chance of a no deal outcome. Further in Europe, ECB President, Mario Draghi, leaves his position on November 1st, and the new leader, Christine Lagarde, will begin her non-renewable term the same day.

On Friday, we saw a gain of nearly 0.5% in the S&P 500 which put it closely within its all-time high, this came from optimism on trade and quarterly earnings that have thus far been less of a disappointment than originally anticipated. This same week, Amazon experienced its first profit drop in over two years as it pushes the investment for free same-day delivery while other notable earnings next week include Alphabet, GM and Mastercard. Next week’s Fed meeting is having effects on Treasury yields with investors putting a high probability on the Open Market Committee cutting interest rates by another 25 basis points. Steepening of this yield curve has occurred as market sentiment pushes longer term maturities higher due to the new trade optimism and equity markets marching along. International and emerging market stocks also gained during the week despite broader increases in protests across the globe including Spain, Lebanon, Chile, Hong Kong and more.

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