This past week past was fulfilled with a lot of volatility due to multiple reasons such as the trade war between China and the US, the Federal Reserve as well as its course of the interest rate over 2019, the partial government shutdown, and the political risk both in Europe (particularly the Brexit) and the US.
- The weekly performance of US markets was up across the board. The Dow Jones gained 2.4%, Nasdaq gained 3.5%, and the S&P 500 gained 2.5%. The Dow Jones recovered almost half of the loss accumulated last month. From December 3rd through December 24th, the index lost 4,000 points.
- The partial shutdown is on track to be the longest in US history (24 days), which has led JP Morgan to lower its GDP growth estimates to 2% for the first quarter.
- The Chairman of the Federal Reserve, Jerome Powell, has softened his language on increasing interest rate too soon, reassuring investors that the Fed is listening carefully to the market’s concerns.
- China and the US officials discussed their trade disagreements. Yet several talks need to take place before coming to an agreement. President Trump was supposed to resume these talks with China in Davos, Switzerland during the World Economic Forum (WEF). Due to the partial government shutdown, Donald Trump announced, last Thursday, that he will not participate at the WEF.
- Even though the Chinese economy is slowing down, the government announced several stimulus programs to boost its economy.
- Finally, the Consumer Prices Index has dropped for the first in 9 months by 0.1% was due in part to a decline of gasoline prices.