Market Watch- Nov. 16, 2018
U.S. Markets Get Mid-Term Bounce; Oil Enters Bear Territory
The Dow jumped nearly 550 points Wednesday as U.S. stocks extended a recent rebound, after midterm elections delivered a divided Congress with the Democrats taking the House of Representatives and Republicans adding to their majority in the Senate. In Wednesday’s session, the Dow rose 2.1%, while the tech-heavy Nasdaq climbed 2.6%. The S&P 500 also added 2.1% – the largest postelection gain for the index since 1982. Trading was largely mixed Thursday as investors contemplated the growing divide between the two parties, the exit of Attorney General Jeff Sessions and President Trump’s confrontational press conference following the midterms. Meanwhile, the Fed held short-term interest rates steady Thursday and offered a largely positive assessment of the U.S. economy, suggesting another rate increase is likely in December. U.S. oil prices closed in bear-market territory Thursday, with prices dropping for a ninth straight session on concerns that a global supply surplus that could overwhelm demand. While it seemed like a trade agreement between Canada, the U.S. and Mexico was a done deal, securing congressional approval of the reworked NAFTA agreement, aka USMCA, may become more difficult with a divided Congress. Trade analysts now say getting the agreement through Congress next year may be unlikely. Somewhat surprisingly, Chinese exports surged last month, despite many economists’ expectations for a slowdown resulting from the trade war with the U.S. Demand for Chinese goods grew in developed and developing markets, according to customs data released Thursday. Despite being the first full month covered by all U.S. tariffs on China, October saw exports to the U.S. rise 13% versus a year ago, while imports from the U.S. fell nearly 2%. The latest numbers suggests China maybe benefitting from a weaker yuan and unexpectedly healthy global demand.
(Big Picture – by Bill Curry)
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