|Day's Range||3,156.51 - 3,182.68|
|52 Week Range||2,346.58 - 3,182.68|
Fed Chairman Jerome Powell described the U.S. labor market as "strong" but not "tight," admitting that the labor market is not as close to maximum employment as it once thought.
With the end of the year and the decade fast-approaching, Wall Street strategists have begun to deliver their expectations about where the stock market will close out 2020.
The scale of Boris Johnson's election victory on Thursday may be enough to draw back billions of pounds of investment that have sidestepped UK stocks for years over Brexit, mirroring the U.S. market surge seen after Donald Trump's election three years ago. With an unexpectedly large 80 seat majority in parliament, the resounding win for British Prime Minister Johnson, who campaigned largely on a slogan of pushing his Brexit deal through in January, could mark a critical turning point for UK equity - the laggard of developed world stock markets over the last decade. If so - and combined with a government spending stimulus in an early post-election budget - the signal to small businesses, the wider UK economy and foreign investors could be electric.
U.S. President Donald Trump's limited trade deal with China removes a major hurdle for Apple and other technology stocks that have already surged this year to record highs. China has agreed to boost imports of U.S. energy, pharmaceutical and agricultural products, although Chinese officials offered no details on the amount of U.S. goods Beijing had agreed to buy. If it is signed, Trump's long-awaited deal will be a relief to Apple, among the U.S. companies with the most to lose in the trade war between the world's two largest economies, along with chipmakers who make the components in its devices, which are mostly made in China.
(Bloomberg) -- It started last Friday, with a blowout U.S. jobs report that beat all expectations. Then in quick succession late Thursday investors got news that the guns will be holstered in the U.S.-China trade war, and that Britain is lifting itself out of the quagmire of a hung parliament.Suddenly, all the worries about a global recession, yet another wave of tariff hikes between the world’s two largest economies and a messy U.K. breakup with the European Union are fading from view. It may be Friday the 13th, but those who made an early start on JPMorgan Chase & Co.’s call for risk-on trades in 2020 can count themselves lucky.The S&P 500 Index and Nasdaq Composite logged record closes Thursday, helping push MSCI’s all-country world gauge to its first all-time high since the eve of the global rout in January 2018, back when a stocks “melt-up” was the narrative of the day. In currencies, the yen fell and the yuan soared. Bond yields climbed, with 10-year Treasuries around 1.9% and their Japanese counterparts in recent days straddling 0% for the first time since March.The moves came on news that President Donald Trump signed off on a phase-one deal with China that averts the Dec. 15 introduction of another wave of U.S. tariffs. The S&P 500 swung between gains and losses in Friday trading, as neither side delivered sufficient details to assuage investors trade issues have been fully resolved. In the U.K., Prime Minister Boris Johnson cruised to a big majority, an election result that should guarantee passage of his Brexit deal with the EU.“The good news just seems to keep coming for markets,” said Kerry Craig, a Melbourne-based global market strategist at JPMorgan Asset Management. “Investors will be delighted to check their stockings and realize they won’t be receiving the lump of coal” they got last year, when global equities tumbled in the fourth quarter.In a stark contrast to the liquidity crunch of late 2018, the Federal Reserve has been a major ally for those bullish on risk this year-end. The U.S. central bank started injecting liquidity in October at a pace of $60 billion of T-bill purchases a month, and Chairman Jerome Powell said Wednesday if needed the initiative could adjust to buying coupon-paying securities as well.Bets on the Fed have shifted as risks eased over the past week. Futures trading suggests just a 69% chance of an interest-rate cut in 2020. Thursday last week, one cut was fully priced in, with a 13% chance of another one by the end of next year.The ground is shifting for others, too. As recently as a month back, the Bank of Japan was seen by some as needing to head deeper into negative territory with its policy rate. But now, with the yen weakening past 109 per dollar and Japan’s government embracing a fiscal-stimulus package, things look different.“We’re perhaps seeing the start of a strong yen decline -- Trump’s tweet, the Brexit results have flipped the yen on its head,” said Vishnu Varathan, head of economics & strategy at Mizuho Bank Ltd. in Singapore. “We could see haven demand wane into 2020. There might be even a last hurrah before the year-end as risk bulls get their way, and push the yen lower from here.”Bringing hope to both Japanese institutional investors and those the world over is the reduction in the pool of negative-yielding bonds. It shrank to $11.5 trillion as of Thursday, down from the record $17 trillion hit in August when the trade war was raging.How long the Christmas-time cheer will last remains a question. On three of the key risks, doubts remain. Brave is the analyst that predicts smooth sailing in the U.S.-China relationship ahead; no American presidential candidate is running on the “be nice to China” ticket. Johnson’s looming majority may guarantee the U.K. leaves the EU in January, but the two will still need to negotiate a trade deal, meaning the “hard Brexit” scenario could yet be on the horizon.As for global recession risks, while the consensus is that growth will pick up in 2020 thanks to this year’s monetary easing and moves in a number of countries to embrace fiscal stimulus, that view isn’t universal. In Australia, an economy closely tied to demand for important inputs including coal and iron, asset managers even see the central bank adopting quantitative easing next year.And some warn that the U.S. presidential-election season, set to kick into high gear next month in the leadup to the Feb. 3 Iowa caucuses, could pose dangers. The populist platform from onetime front-runner Senator Elizabeth Warren has triggered warnings about the record-setting U.S. bull market for equities coming to an end.Even if all the good news stays intact, there’s the challenge of valuations. How much gas is there left in the tank after the S&P 500 soared 26% plus in 2019? In credit, U.S. spreads are also historically low.“I wish we had kept some of the good news for 2020,” Mark Matthews, head of research Asia at Bank Julius Baer & Co., said on Bloomberg TV. “What this is going to do is cause a really powerful rally into the year end, so what’s going to be left over to get priced in to 2020?”The plethora of riches this week includes Republicans and Democrats getting a bipartisan deal to fund the government before the Dec. 20 spending deadline. Meantime, investors have shrugged off the Trump impeachment story, confident that the Republican majority in the Senate means he’ll remain in office.For emerging markets, a newly solid Chinese yuan and a retreat in the dollar to the weakest since July offers encouragement. A weakening yuan that dragged developing nations’ currencies down with it had made dollar debt more expensive to service. The yuan Friday traded past the 7-per-dollar line that had briefly spooked markets earlier this year.“It feels like all the bricks in the wall of worry are falling at once,” said Peter Atwater, president of Financial Insyghts.(Updates with latest trade development)\--With assistance from Garfield Reynolds, Cormac Mullen, Gregor Stuart Hunter, Tracy Alloway, Ruth Carson and Matthew Burgess.To contact the reporter on this story: Christopher Anstey in Tokyo at email@example.comTo contact the editors responsible for this story: Christopher Anstey at firstname.lastname@example.org, Joanna OssingerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- U.S. stocks ended a tumultuous session higher with major benchmarks notching records as investors attempted to assess the contours of a partial deal reached between the U.S. and China.Stocks swung between gains and losses throughout the day, while Treasuries surged as neither side delivered enough details to calm investors who sent shares to records Thursday on reports fresh tariffs due Sunday have been averted.President Donald Trump confirmed as much Friday, but it remained unclear whether China agreed to enough agricultural purchases or if the U.S. had planned to roll back some existing tariffs.The S&P 500 eked out a gain, rising for the ninth week out of the last 10, after Trump signaled he’d cut in half the tariffs that took hold in September. The U.S. will maintain levies that began in the spring. The 10-year Treasury yield fell below 1.82%.“Both sides now seem to be negotiating in public,” Matt Maley, an equity strategist at Miller Tabak & Co., said. “The uncertainty makes it impossible to make concrete investment decisions. These negotiations have turned into a circus.”The dollar was steady against major peers after U.S. retail sales data fell short of estimates. West Texas crude and gold advanced.The fresh trade headlines overshadowed the U.K. election that puts the country on track to leave the European Union next month. The FTSE 100 index rose more than 1% and the pound surged.These are the main moves in markets:StocksThe S&P 500 Index rose 0.01% at 4 p.m. New York time.The Nasdaq 100 added 0.2%.The Stoxx Europe 600 Index advanced 1.1%.The U.K.‘s FTSE 100 Index rose 1.1%.The MSCI Asia Pacific Index gained 1.6%.CurrenciesThe Bloomberg Dollar Spot Index was flat.The British pound increased 1.3% to $1.3338.The euro dropped 0.1% at $1.1114.The Japanese yen was steady at 109.31 per dollar.BondsThe yield on 10-year Treasuries fell seven basis points to 1.82%.The two-year yield fell six basis points to 1.60%.Germany’s 10-year yield lost one basis point to -0.279%.Britain’s 10-year yield gained three basis points to 0.845%.CommoditiesWest Texas Intermediate crude advanced 1.3% to $59.97 a barrel.Gold futures rose 0.6% to $1,480.70 an ounce.\--With assistance from Cormac Mullen.To contact the reporters on this story: Luke Kawa in New York at email@example.com;Vildana Hajric in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Christopher Anstey at email@example.com, Jeremy HerronFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Based on the early price action and the current price at 3164.00, the direction of the December E-mini S&P; 500 Index the rest of the session on Friday is likely to be determined by trader reaction to yesterday’s close at 3168.00.
(Bloomberg) -- Global earnings growth will return in 2020, boosting equities, and investor attention will shift to fiscal policy as central banks run out of ammunition to stimulate the economy, according to Fidelity International.Stocks should improve modestly next year as corporate profits climb about 8% amid an economic recovery, according to Romain Boscher, global chief investment officer for equities. He favors shares from Europe and Japan, which tend to have lower valuations than those from the U.S.Next year will be “a tipping point for the cyclical recovery,” Boscher said at an investor event in Singapore on Friday. “There are good reasons on the monetary side and even on the more technical side,” such as the potential for inflows.American stocks have had a standout year, with the S&P 500 Index surging 26% through Thursday, compared with a 16% gain in the MSCI World ex-U.S. Index, as the U.S. economy held relatively steady and the Federal Reserve cut rates three times. The S&P 500 closed at a record high Thursday.Still, Fidelity’s preference for international stocks dovetails with that of Morgan Stanley economists including Chetan Ahya, who said in a note Thursday that the fading effects of U.S. policy support will help shares in the rest of the world bounce back.Here’s a selection of Fidelity’s other investment views:Treasury inflation protected securities are among the cheapest assets in bond markets as investors continue to underestimate the potential for faster inflationPositive on local-currency emerging-market duration as high real rates allow central banks to cut borrowing costsGlobal economy likely to avoid a recessionYen looks cheap among G-10 currencies and remains a good hedge in risk-off scenariosBank stocks look attractive on valuations and could do well if there’s a resurgence in inflation(Adds deck headlines.)\--With assistance from Brendan Walsh.To contact the reporters on this story: Joanna Ossinger in Singapore at firstname.lastname@example.org;Ruth Carson in Singapore at email@example.comTo contact the editors responsible for this story: Christopher Anstey at firstname.lastname@example.org, ;Nicholas Reynolds at email@example.com, Cormac Mullen, Cecile VannucciFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
I just knew last night was going to be a game-changer. Thankfully Grab food operates 24 hours in Bangkok, and the coffee cupboard was stocked. As we finally have a Phase one trade deal signed sealed and delivered.
As holiday trading sets up in the global markets, the SPY is starting to show signs of volatility and warning of a potential top by gapping as price attempts to trade sideways. This type of top formation, along with the fact that the overnight REPO facility continues to roil the markets, continues to draw our researchers to the conclusion that some type of debt or liquidity issue is just below the surface of the global markets.
Global equity markets and oil prices rose on Friday after China and the United States agreed on an initial trade deal that rolls back some U.S. tariffs in exchange for China's increased purchase of farm goods, coming just ahead of a deadline for a new round of U.S. tariffs. Beijing has agreed to buy $32 billion in additional agricultural goods over the next two years, U.S. officials said, from a baseline of $24 billion purchased in 2017, before the trade war started.
(Bloomberg) -- U.S. stock futures rose after President Donald Trump signed a deal that will avert new tariffs on Chinese goods, removing a threat to economic growth and corporate profits.Contracts on the S&P 500 climbed 0.3% as of 6:01 p.m. in New York. The underlying gauge rallied to an all-time high as speculation mounted that the two sides would de-escalate the nearly two-year trade war. Nasdaq 100 futures jumped 0.3% and Dow Jones Industrial Average contracts rose 0.3%.The deal presented to Trump included a promise by the Chinese to buy more farm goods and officials also discussed reducing existing tariffs, according to people familiar with the situation. The terms have been agreed but the legal text has not yet been finalized, the people said.A breakthrough on trade removes a major hurdle for equity investors already celebrating after one of the strongest years for stocks in two decades. The threat of tariffs hamstrung corporate executives and threatened to dent consumer spending, one of the main pillars of the economy.“It’s deescalation. It’s no longer a headwind,” Sandip Bhagat, Whittier Trust’s chief investment officer, said by phone.The risk-on mood sparked by trade optimism spread Thursday to bank stocks, where one of the last vestiges of the financial crisis crumbled when the S&P 500 Financials Index briefly surpassed its previous closing high, eclipsing the record they touched in February 2007 before losing more than 80% of their value in less than two years.The trade developments added to an already bullish mood this week after the Federal Reserve signaled it is in no rush to raise interest rates as the economy shows steady improvement and late Thursday announced it’s ramping up measures to combat end-of-year funding risks.Bulls got yet another dollop of good news when exit polls showed Conservatives winning a clear majority in U.K. elections, putting the country on track for an orderly exit from the European Union next month.The S&P 500 has rallied 6.4% since September and is up 26% for the year, the most since 2013.“So much uncertainty has come out of the market just in the fourth quarter alone, which is in sharp contrast to what we saw last year,” Bhagat said. “No deal Brexit is off the table, Phase 1 is about to get signed, the Fed who was guilty last year for creating a lot of confusion couldn’t have been clearer this time around, and then growth has been ahead of expectations on so many different fronts.”To contact the reporters on this story: Sarah Ponczek in New York at firstname.lastname@example.org;Vildana Hajric in New York at email@example.comTo contact the editor responsible for this story: Jeremy Herron at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The ill-performing energy sector could be about to stage a major turnaround, but it won’t be the first time that contrarian investors get burned trying to play a rebound
(Bloomberg) -- A financial startup wants to create a new version of the ETP that enabled bets against stock volatility before infamously blowing up during the February 2018 market rout.Volatility Shares LLC has applied to Cboe Global Markets Inc. to register an exchange-traded fund that would give investors the ability to short futures on the Cboe Volatility Index, according to a new filing.VIX futures are linked to that measure, a gauge of the 30-day implied volatility of the S&P 500 Index that’s often known as the market’s “fear gauge.” It moves inversely to U.S. stocks about 80% of the time. While the new fund would be the only one moving one-for-one in the opposite direction of short-term VIX futures, an existing fund offers half of that exposure.Volatility Shares is a partnership formed by Stuart Barton, a partner at Invest in Vol -- a financial adviser -- and colleague Justin Young. Michael Venuto and Guillermo Trias of Toroso Investments, which specializes in ETFs, are also involved in the new firm.Barton said he hopes the product will be available early in 2020.The ETF’s design changes some of the attributes that may have contributed to the flame out of XIV -- the VelocityShares Daily Inverse VIX Short-Term ETN -- which closed after a record one-day jump in volatility on Feb. 5, 2018.XIV gave retail investors direct access to the short-volatility trade, amassing nearly $1.9 billion in assets shortly before its demise. The bets paid off throughout 2017, one of the most tranquil years on record for the S&P 500. XIV was so popular that it even had its own subReddit: /TradeXIV. The prospectus did warn that the note could be shuttered if it lost 80% of its value in one session, but many investors had not read the fine print.A similar product, SVXY, dialed down its leverage in the aftermath of the February volatility spike, and additional products that track other parts of the VIX futures curve received relatively little interest.“What happened on Feb. 5 was kind of a problem that I think the original architects of those products hadn’t foreseen,” said Barton. “That left a gap in the markets, and we were asking people to provide a solution. Nobody stepped up, so we did the research and leg work and hope to bring that solution to market.”Some strategists alleged that front-running of the note’s well-known end-of-day rebalancing activity contributed to the record jump in volatility on Feb. 5.The new product would be an exchange-traded fund rather than a note. Unlike ETNs, which are unsecured debt obligations, ETFs are backed by a pool of assets. Volatility Shares would aim for the ticker SVIX, according to a person familiar with the matter.SVIX would track the Short VIX Futures Index, whose backtest suggests a loss of just 30% on Feb. 5, compared to the 96% retreat in the indicative value of XIV. In November, Barton penned an article outlining his thoughts on better methodologies for constructing volatility ETPs, indicating that the end-of-day rebalancing behavior was a weakness. He raised the idea of a 15 minute time-weighted average price ending at 4 p.m. New York time as an alternative.Informal surveys suggested robust appetite for a product like XIV. After the note’s implosion, Devesh Shah, who helped invent the VIX index, said he didn’t know why these products existed -- while predicting that a successor would soon emerge.“And what’s going to happen as a result of this? Nothing, other than in a few months’ time someone’s going to come up with a new XIV, and everyone’s going to start putting money into that,” he said back in February 2018. “That’s OK, that’s how the world goes.”\--With assistance from Vildana Hajric and Rachel Evans.To contact the reporter on this story: Luke Kawa in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Wall Street's main indexes hit record highs on Thursday following news that the United States had reached a "deal in principle" with China to resolve a trade war that has rattled markets for nearly two years. Wall Street has focused on the new round of tariffs, hopeful they would at least be delayed as the world's two largest economies make progress on an initial trade deal. The Dow Jones Industrial Average rose 220.75 points, or 0.79%, to 28,132.05, the S&P 500 gained 26.94 points, or 0.86%, to 3,168.57, and the Nasdaq Composite added 63.27 points, or 0.73%, to 8,717.32.
(Bloomberg) -- One of the last vestiges of the financial crisis crumbled Thursday as financial stocks in the S&P 500 briefly surpassed their previous closing high, eclipsing the record they touched in February 2007 before losing more than 80% of their value in less than two years.Banks, brokerages and insurance companies tracked by the S&P 500 Financials Index needed almost 13 years to make the round trip, which required a sixfold increase starting on March 6, 2009. They’re the last industry in the S&P 500 to erase their 2008-era decline.“What a long, strange trip it’s been,” said Kim Forrest, chief investment officer at Bokeh Capital Management in Pittsburgh. “The existing banks -- because there’s a whole lot less banks than there were in 2007 -- have survived and changed in meaningful ways, that’s what this reflects. They’ve shoehorned themselves into this new low interest-rate environment.”As bad as the financial crisis was for the stock market at large, it was worse for bank shares, whose peak-to-trough decline was 1 1/2 times as large as the full S&P 500. On the way back up, profits have been crimped by regulatory efforts to rein in risk taking, falling interest rates, which narrow the profit margin of loans, and trends like passive investing and automation which have supplanted some of Wall Street’s traditional roles.Along the way, the influence of banks in the market has dwindled. As things stand now, the industry represents 13% of the S&P 500, down from a peak of 22% in 2006.The final leg came Thursday as equities got a boost from optimism the Trump administration will strike a trade deal with China. Lenders in particular got a lift, as the risk-on mood sent bonds tumbling the most in five weeks. That pushed 10-year interest rates higher.There are signs that the industry’s advance is gathering pace. Up 29% this year, financial shares have exceeded all other groups in the S&P 500 except for technology. Years of cost cutting have paid off. Earnings are expected to rise 3.4% in 2019, more than double the pace for all S&P 500 firms, data compiled by Bloomberg Intelligence showed.“It’s been a very cautious and somewhat perilous climb back,” said Max Gokhman, the head of asset allocation for Pacific Life Fund Advisors. “Financials have had to deal with significantly higher regulatory scrutiny, less available revenue streams, virtually nonexistent net interest margins, and ever-higher fee pressures. Still, they’ve found ways to eke out profit.”(A prior version of this story corrected the number of years needed for the record.)\--With assistance from Sarah Ponczek.To contact the reporters on this story: Lu Wang in New York at email@example.com;Vildana Hajric in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Chris NagiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. President Donald Trump said the U.S. and China are very close to signing a “big” trade deal that’s expected to see him reduce existing tariffs and delay ones due to take effect on Sunday, sending stocks to new records.“They want it, and so do we!” he tweeted five minutes after stocks opened in New York.Trump is due to meet with key trade advisers at 2:30 p.m. at the White House, a person familiar with the negotiations said. His statement Thursday that the U.S. wants a deal soon contrasted with remarks he made earlier this month that suggested he was willing to wait until after the 2020 elections in the U.S. to sign a pact. The S&P 500 Index rallied to a record after Trump’s tweet, and the MSCI All-Country stock index surged to its first record since January 2018.The U.S. has added a 25% duty on about $250 billion of Chinese products and a 15% levy on another $110 billion of its imports over the course of a roughly 20-month trade war. Discussions now are focused on reducing those rates by as much as half, as part of a phase-one agreement Trump announced almost nine weeks ago.A phase-one pact is expected to be built largely around a significant increase in Chinese agricultural purchases in exchange for the U.S. delaying a new round of tariffs scheduled to take effect Dec. 15 and a reduction in existing levies on Chinese goods.Officials have also said it will include Chinese commitments to do more to stop intellectual-property theft and an agreement by both sides not to manipulate their currencies. Put off for later discussions are knotty issues such as longstanding U.S. complaints over the vast web of subsidies ranging from cheap electricity to low-cost loans that China has used to build its industrial might.While the White House gathering may highlight continuing divisions over whether to hit Beijing with a new wave of tariffs, Trump’s tweet suggests he may be willing to forego escalation for now.Officials from the world’s two biggest economies have been locked in negotiations on the phase-one deal since Trump announced it.The new duties, which are due to go ahead at 12:01 a.m. Washington time on Sunday unless the administration signals otherwise, would hit some $160 billion in consumer goods from China including smartphones and toys.Before today, Trump’s advisers have sent conflicting signals and stressed that he hadn’t made up his mind on the next steps. Advocates of delaying the tariff increase have argued that continued negotiations with Beijing will enable him to maintain a tough line with Beijing without the economic damage that more import taxes might bring.The decision facing Trump highlights one dilemma he confronts going into the 2020 election: Whether to bet on an escalation of hostilities with China and the tariffs he is so fond of or to follow the advice of more market-oriented advisers and business leaders who argue a pause in the escalation would help a slowing U.S. economy bounce back in an election year.What Bloomberg’s Economists Say...“The outcome of U.S.-China trade talks will be a key determinant of the trajectory for 2020 growth. At one extreme, a deal that takes tariffs back to May 2019 levels, and provides certainty that the truce will hold, could deliver a 0.6% boost to global GDP. At the other, a breakdown in talks would mean the trade drag extends into the year ahead.”--Tom Orlik, chief economistFor the full report, click hereRobert Lighthizer, the U.S. trade representative leading the negotiations with China, is in a camp who sees progress in talks and wants them to continue without further escalation, according to people familiar with the discussions. That would set up a push to conclude the talks in January, possibly before a State of the Union address to Congress by Trump.\--With assistance from Saleha Mohsin and Jennifer Jacobs.To contact the reporters on this story: Jenny Leonard in Washington at firstname.lastname@example.org;Shawn Donnan in Washington at email@example.comTo contact the editors responsible for this story: Simon Kennedy at firstname.lastname@example.org, Brendan Murray, Ana MonteiroFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
U.S. stocks hit record highs on Thursday after President Donald Trump tweeted that Washington was "very close" to a trade deal with Beijing and on a report that U.S. trade negotiators had offered to cancel a new round of tariffs on Chinese goods. The three main indexes opened lower but quickly gained ground after Trump's statement, which comes just days before the tariffs kick in on Dec. 15. The Wall Street Journal reported that U.S. negotiators have offered to slash existing levies by as much as half on roughly $360 billion of Chinese-made goods, supporting the rise.
Investing.com - The major stock indexes surged to new intraday highs, and the S&P; 500 and Nasdaq Composite indices closed at new records on reports that the United States and China have "an agreement in principle" on a phase one trade deal.
The S&P 500 and Nasdaq closed at record highs on Thursday, propelled by news that a trade deal was in the works. A source told Reuters that the White House had reached a 'phase 1' deal with Beijing. Meanwhile new economic data showed producer prices were unchanged in November, signaling inflation remains soft. The numbers strengthened the Federal Reserve's case to keep interest rates steady. But this economist expects the U.S. economy will eventually pick up speed next year. Steven Blitz is TS Lombard's chief U.S. economist. (SOUNDBITE) (English) TS LOMBARD MANAGING DIRECTOR, GLOBAL MACRO, CHIEF U.S. ECONOMIST, STEVEN BLITZ, SAYING: "I think the economy is going to be slow in terms of overall GDP, probably this quarter and next quarter. But after you get to mid-year growth should start to pick up." Financials and energy led the way among sectors in the S&P, while real estate, utilities and other defensive groups were negative. Meanwhile Facebook shares dropped following a Wall Street Journal report that the U.S. Federal Trade Commission is seeking a preliminary injunction against the social media company for how its products interact.