US-China trade talk optimism lifts stocks

US-China trade talk optimism lifts stocks

  • Investments

Markets react to outlines of a new trade deal between the US and China, and closer to home Brexit will be high on the agenda at the European Council meeting taking place later this week. Ian Slattery reports.

Stocks finished the week on a high after the US and China agreed on outlines to a new trade deal. This includes a doubling of Chinese purchases of American agricultural products. Whether this proves to be the end of the tensions remains to be seen.

US economic data was fragile last week, as inflation figures, small business confidence, and hiring expectations all dropped. Eurozone data wasn’t much better with German factory orders declining in September.

Positive developments in the Brexit talks helped lift UK and Irish stocks late last week, although some stumbling blocks have materialised over the weekend.

Finally, the US Federal Reserve issued a positive surprise to markets with the announcement that it will begin to expand its balance sheets from the middle of this week, in an effort to shore up the banking reserve framework.

 

 

1 Week Return

07.10.19 to 14.10.19

Year to Date Return

01.01.19 to 14.10.19

 

Local Currency

Euro

Local Currency

Euro

World

1.3%

0.9%

15.7%

19.8%

US

1.1%

0.6%

18.6%

23.4%

Europe

1.8%

1.8%

17.4%

17.4%

Ireland

2.7%

2.7%

21.2%

21.2%

UK

0.7%

2.5%

6.8%

9.5%

Japan

1.5%

0.2%

7.8%

13.8%

Hong Kong

0.6%

0.1%

0.0%

3.9%

Corporate Bonds

-0.3%

-0.3%

6.4%

6.4%

Sovereign Bonds

-1.35%

-1.35%

13.5%

13.5%

 

Equities

Equities were up across all major global markets last week. Closer to home, Ireland was up 2.7% this week and up 21.2% year to date.

Fixed Income & FX

The US 10-year yield recovered further last week to finish at 1.73%. The German equivalent is now at -0.48%. The Irish 10-year bond yield is at 0.01%. The Euro/US Dollar exchange rate finished at 1.10, whilst Euro/GBP was at 0.88.

Commodities

Oil finished the week at $54 per barrel, gold finished the week at $1,490 per troy ounce and copper increased to $5,763 per tonne.

 

The week ahead

Tuesday 15th October:

The big US banks of kick off Quarter 3 earnings season.

Wednesday 16th October:

UK inflation and US retail sales figures for September go to print.

Thursday 17th October:

The European Council meeting begins with Brexit the main point on the agenda.

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