The three things you need to know this week: the Fed's balance sheet is set to grow, FOMC participants are split on the forward path and keep an eye out on parameters for ECB purchases next.
Japanese equities outran their global peers in September in an exaggerated response to a temporary thaw in U.S.-China trade tensions. We maintain our underweight on Japanese equities, as they are still particularly vulnerable to a growth slowdown in China and we see no sustained letup in the protectionist push.
Prospects of a U.S./China trade “truce” stoked a strong risk-on sentiment, significantly boosting U.S. Treasury yields. The increase offset a majority of the previous week’s declines.
After declining for three weeks, equity prices advanced last week, helped largely by Friday’s sharp rally following the announcement of a “Phase One” U.S/China trade deal. Sentiment was also helped by some improving economic data.
With what many are calling the maturation of the current economic cycle, is the corporate default rate on the precipice of taking off? S&P is already calling for a 30-35% probability of a recession by the end of 2020. Economic data does show a slowing down while the proportion of high yield companies issuing debt is growing.
When it comes to cultural tie-ins associated with the number four one can go in any number of directions, including superhero, think Fantastic 4; popular music, think The Four Tops; and sports, think The Four Horsemen of Notre Dame. Well, as we focus on 4 thoughts for The 4th quarter we go toward entertainment, specifically the boardgame Connect4.
Non-U.S. developed markets led the week as U.S.-China trade talks reignited while the European Union opened up to renegotiation. U.S. earnings may fall in the third quarter.
We learned in Finance 101 that beta is a metric designed to gauge sensitivity. A stock with a beta of 1.50 relative to the S&P 500 Index should, on average, gain or lose $1.50 for every $1 gained or lost by the index.
Read the Weekly Market Snapshot to stay up-to-date with stock markets and sectors, bond market returns and financial news for the week.
Review the performance of global stock and bond markets over the past week, along with relevant insights from T. Rowe Price economists and investment professionals.
Market Week in Review: Does the latest U.S. inflation report strengthen the case for another rate cut?
The latest round of trade negotiations between the U.S. and China kicked off Oct. 10 in Washington, D.C. So far, the talks have been positive, Robison noted, with the possibility that the U.S. will scrap a planned Oct. 15 tariff increase on Chinese goods. In addition, China may commit to purchasing more soybeans from the U.S., and the two nations may also strike a deal that would prevent currency devaluation.