The S&P 500 closed at a record high on Friday after a heavy week of headlines. On the economic front, the Fed, as expected, lowered rates a third time this year indicating that it would likely pause after this round. U.S. GDP, corporate earnings, and jobs data reported this week all supported the Fed’s position that the economy remains solid. Markets wobbled during the week on concerns of a backslide on “phase one” of the trade deal with China. The initial signing ceremony was derailed after Chile canceled a November international summit. However, these fears were assuaged after the White House communicated that the deal would continue to move forward with a new venue. In California, firefighters battled wildfires and PG&E cut power in high-risk areas to stop high winds and live power lines from triggering more outbreaks.
With the majority of corporate earnings reports in for the third quarter, investors were happy with the results. On the one hand, the global tensions have taken their toll and – as one would expect – companies with large exposure to international trade had lower top and bottom-line growth than their peers. S&P 500 earnings have also declined versus the same quarter last year. Most companies exceeded analyst expectations, though, and current projections are that fourth-quarter earnings will again be positive. Mixed with the solid economic reports, this pushed U.S. large-cap stocks up 1.5% for the week with international stocks up nearly the same amount. Bond prices increased a bit on lower yields rounding out a nice week for investors.
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