A trade milestone. U.S. stocks are higher, adding to all-time highs amid another breakthrough in the U.S.-China trade relationship. The S&P 500 Index notched its fourth record high in January after the United States and China signed a phase-one trade deal on Wednesday. Better-than-expected fourth-quarter earnings reports, especially the encouraging results from larger U.S. banks, have also helped lift stocks the past few days.
Improving global conditions. Wednesday’s trade milestone also propelled the MSCI All-Country World Index to its third-straight record high. Global markets have benefited over the past few months from increasing trade optimism and stabilizing economic data. The Organization for Economic Co-operation’s Composite Leading Indicators Index, which tracks leading data from several regions around the globe, rose for a third straight month in November. The United States, Germany, and the United Kingdom were upgraded from “signs of stabilizing growth momentum” to “stabilizing growth momentum” as the global outlook continued to improve.
Retail sales climb. Retail sales climbed 0.3% in December, in line with consensus estimates. Control group sales, a cleaner measure of retail sales’ contribution to gross domestic product, rose 0.5%, its biggest month-over-month gain since July 2019. Consumer data for the 2019 holiday season has been mixed, with signs of weakness already popping up in brick-and-mortar retailers’ fourth-quarter results. However, we’re still hopeful that improving economic conditions and a solid job market will help the U.S. consumer power growth in 2020.
Corporate sentiment jumps. Corporate sentiment surged through the end of 2019, according to the Federal Reserve’s latest Beige Book, published Wednesday. Our proprietary Beige Book Barometer, which measures corporate sentiment in the report through the number of “weak” and “strong” words, jumped the most since April 2016 as the United States and China signaled a signing date for their phase-one trade deal. We’ll highlight more takeaways from the most recent Beige Book today on the LPL Research blog.
LPL Research on CNBC. LPL Financial Senior Market Strategist Ryan Detrick joined The Exchange with Brian Sullivan yesterday to discuss what the big surge in momentum stocks could mean. You can watch the full interview here.
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