S&P 500 Resumes Setting Records During Thanksgiving Week

The S&P 500 (Index: SPX) resumed setting records during Thankgiving Week 2019, achieving a new high of 3,153.63 on the Wednesday, 27 November 2019 before cooling off with the turkey dinner leftovers after the holiday to close the week at 3,140.98.

That puts the S&P 500 right in the middle of our newly added redzone forecast range, which assumes investors will remain primarily focused on the distant future quarter of 2020-Q3 from 26 November 2019 through 7 January 2020.

As for why investors would focus on that particular future quarter, that has a lot to do with the anticipated timing of the Federal Reserve’s next change to the Federal Funds Rate. The CME Group’s FedWatch Tool indicates that investors are currently giving better-than-even odds of a quarter point rate cut being announced by the end of September 2020.

Overall, with U.S. markets being closed on Thursday, 28 November 2019 for the Thanksgiving holiday, it was a relatively quiet week for investors.

The same can’t be said for foreign stock markets however, where a number of representatives from various nation’s central banks made similar statements during Thursday that they had to backtrack from on Friday.

Monday, 25 November 2019

• Oil climbs on U.S.-China trade talks optimism
• Top U.S. and Chinese trade negotiators hold phone call, discuss core issues

• China and U.S. moving closer to trade deal, but no agreement on tariff rollbacks: report
• No ‘phase two’ U.S.-China deal on the horizon, officials say
• Going whole hog: U.S. tells exports to report pig carcass sales as China buying soars

Bigger trouble developing in Mexico: Mexico entered recession in early 2019, dealing blow to president

Confusion reigns among Eurozone ECB minions:

• ECB has made government borrowing 1 percentage point cheaper: Lane
• All ECB targets up for discussion in coming months: Holzmann says
• Nudge up in bond yields shows reduced pessimism on economy: ECB’s Lane – Reasoning from a price change.

Tuesday, 26 November 2019

• Oil gains, bolstered again by U.S.-China trade talks
• Trade deal dynamics:

• Trump says near deal with China, but U.S. also has eye on Hong Kong
• Mexico steps up pressure on U.S. Congress to approve trade deal

• Pelosi says U.S.-Mexico-Canada trade deal is ‘within range’

Wall Street crawls to record levels on trade hopes

• It’s not just trade hopes fueling the U.S. stocks rally

Wednesday, 27 November 2019

• Oil slips after U.S. crude build and record production
• Bigger trouble developing in China:

• China’s industrial profits post steepest fall in eight months

Bigger stimulus developing in China:

• China wants to speed up business reforms, investment to boost slowing economy: premier
• China front-loads $142 billion in 2020 local government bonds to spur growth

Fed’s Kaplan: Open to looking at longer time frame for inflation

Solid data, trade hopes lift Wall Street to records

Thursday, 28 November 2019 – U.S. Markets Closed

• Oil ends mixed, pressured by U.S. tensions with China over rights bill

• Trump approves legislation backing Hong Kong protesters
• China warns of ‘firm counter measures’ after Trump signs U.S. legislation on Hong Kong

Bigger trouble developing in China, Japan, and the Eurozone:

• China’s factory activity seen contracting for seventh month on trade pressure: Reuters poll
• Japan’s retail sales slump the most since 2015 as tax hike hits demand

Central banks running dry? Pleas for bigger fiscal stimulus developing in the Eurozone and Japan:

• Euro zone business lending rebounds in October after plunge: ECB

• ECB’s Villeroy urges Germany to use fiscal tools to spur growth

Japan government banks to aid firms to prepare for overseas downturn: document

• BOJ’s Kuroda offers endorsement to more fiscal spending

World stocks stall as U.S.-China tensions flare again

Friday, 29 November 2019

• Oil slumps but sets monthly gain ahead of OPEC meeting
• Top U.S. retailers absorb tariff pressure ahead of holiday shopping season
• Bigger trouble developing in China, Japan, and the Eurozone:

• Japan October household spending seen falling after sales tax hike – Reuters poll
• German retail sales drop in October
• Germany plans rapid state intervention to protect key industries – This is the sort of rapid intervention that’s staged only when expectations arise among officials that it will soon need to happen….

Damage control: Central banks claim they can stimulate national economies more (but don’t want to in face-saving game of chicken with governments):

• China’s PBOC has room to ease policy but won’t squander options – official
• BOJ’s Kuroda: there’s ample room for further easing at present

• BOJ’s Kuroda says no need to ease further now, warns against fiscal complacency

Wall Street slips as U.S.-China tensions weigh, investors watch retail

Want to see a bigger picture of the week’s economic news than you can from just these headlines? Barry Ritholtz outlined the positives and negatives he found in the week’s economics and market-related news.