Week from 4 to 10 November 2019
Though many analysts have long warned the end could be near for the bull market, stocks continue to climb, week after week. Once again, the major indices were significantly up (S&P500: +0.85% ; Nasdaq Composite: +1.06% ; MSCI China All Shares: +2.19% ; Nikkei: +2.37% ; MSCI EMU: +1.88%), with much of the gains built on hopes that a “phase one” U.S.-China trade deal could be signed by the end of the year. At first sight, both countries apparently agreed on Thursday to progressively cancel the tariffs imposed during their devastating trade war but Donald Trump said on Friday that a “complete rollback” was off the table.
Seven of the 11 major S&P sectors moved up, with the financials gaining the most (+2.43%), just before energy shares (+2.01%) on the back of higher oil prices (WTI futures up +1.85%), materials (+2%) and industrials (+1.85%). Technology shares (+1.65%) also provided a boost to the flagship index in the wake of a rally in trade-sensitive chip stocks (Qualcomm: +12.5% WTD ; Qorvo: +7.02% ; Intel: +3.68%) which pushed the Philadelphia Semiconductor index (+2.77% WTD) to a record high at 1,736.78.
By contrast, the most defensive sectors (utilities and real estate down 3.7%, consumer staples down 0.5%) were hit by higher risk appetite and interest rates.
Thus the U.S. 10-year yield finished at 1.94% (vs 1.73% last week), the biggest weekly jump in a month. The 3-month T-bill remained virtually unchanged (1.55% vs 1.52%) thereby steepening the Treasury yield curve significantly over the past month. At the same time, the 10-year Bund yield rose to -0.26% (compared with -0.38% a week ago).
Similarly, IG corporate bonds nose dived (-1.19% in the U.S., -0.38% in Europe) while high yield bonds managed to remain in positive territory (+0.13% in the U.S., +0.44% in Europe).
Like other safe haven assets, gold fell heavily (-3.21%).
Find the full report here: https://www.trackinsight.com/weekly-flow-report/2019-11-08/global