A plethora of economic and political news rocked markets for a second week in a row. Chinese economic data disappointed in November with retail sales posting the worst performance since May 2003 and industrial production growth declining; this combined with the Euro area’s PMI reading at the lowest level in more than four years has added to concerns about the global economic backdrop and what it means for growth going forward. More from Europe, U.K. Prime Minister Theresa May survived a no-confidence vote this week, and the ECB formally ended its three-year, multi-trillion dollar stimulus plan. Eyes are also still on trade discussion between President Trump and President Xi for any positive movement toward a deal.
U.S. large and small company stocks both took a dive lower for a second week in a row wiping out YTD gains for the former index. Each major large company U.S. equity index ended in correction territory this week for the first time since March 2016. Developed international and emerging market countries did not end the week as low as U.S. stocks but did not rally or truncate the latter. As yields remain in decline with the current risk off sentiment, fixed income investments are paring back some YTD losses. The partial inversion of the yield curve subsided to a largely flat spread between the two and five year Treasury rates.
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