Market week: Stocks rise on geopolitical relief

12-13-2019
Market week: Stocks rise on geopolitical relief

U.S.-China trade deal, Brexit clarity

The big North American stock gauges edged up on the week, touching fresh record intraday highs, following an announcement on Friday that a phase one trade deal had been reached between the U.S. and China and a landslide win by the Conservatives in the Dec. 12 U.K. general election.

While details of the trade deal were scarce, U.S. President Donald Trump announced that the $150 million in new U.S. tariffs on Chinese consumer goods that were scheduled to begin on Sunday, would be abandoned. According to Chinese trade representatives, other previously-imposed tariffs would be removed in stages.

In the U.K., the Conservative Party swept to victory with a convincing majority of 365 seats in the 650-seat Parliament, garnering 44% of the popular vote (compared with 203 seats and 32% for the Labour Party), giving Prime Minister Boris Johnson the unequivocal mandate he had sought to implement Brexit as soon as possible. The uncertainty of a possible no-deal Brexit had acted as a headwind on global stock markets, and the newfound clarity has helped improve investor sentiment, particularly in the U.K., where the FTSE 100 index climbed 1.1% on Friday, for a weekly advance of 1.6%.

The U.S. blue-chip S&P 500 Composite Index gained 0.7% on the week, while the Nasdaq Composite Index rose 1.0%, largely on news of the U.S-China trade deal. Toronto’s S&P/TSX Composite Index was more subdued, remaining pretty much flat week-over-week, but kept afloat by a 1.0% weekly gain in crude oil and gold.

Index

Dec. 13, 2019, close

Day

Week

Year to Date

S&P/TSX Composite

17,003.13

0.3%

0.04%

18.71%

S&P 500 Composite

3,168.80

0.0%

0.73%

26.41%

Nasdaq Composite

8,734.88

0.2%

0.91%

31.64%

Gold (US$)

$1,474.30

0.5%

1.04%

15.21%

Oil (WTI) (US$)

$59.80

1.1%

1.01%

31.69%

 

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The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.The big North American stock gauges edged up on the week, touching fresh record intraday highs, following an announcement on Friday that a phase one trade deal had been reached between the U.S. and China and a landslide win by the Conservatives in the Dec. 12 U.K. general election.