Stocks rebounded last week, posting their best gains since February. The S&P 500 climbed 4.85% last week, a percentage jump not reached since the end of 2011. Overall, the large-cap indexes and the tech-heavy Nasdaq outperformed the small caps of the Russell 2000, which rebounded nicely, nevertheless. As has been the case for most of the year, foreign trade made headlines early last week as the United States threatened to impose further sanctions on China in advance of the Group of 20 summit. However, more positive rhetoric from both the White House and China at the end of the week may have quelled worries of an all-out trade war. Comments from Federal Reserve Chairman Jerome Powell last week implied that the Fed may be rethinking the timing of further interest rate hikes, although another quarter-of-a-point bump in December is still a strong possibility.
LAST WEEK’S ECONOMIC HEADLINES
- The second estimate of the third-quarter gross domestic product showed the economy expanded at an annual rate of 3.5%. The GDP grew at an annualized rate of 4.2% in the second quarter.
- Personal income increased by 0.5% in October. Disposable (after-tax) income also grew by 0.5%.
- The first month of fiscal 2019 saw the international goods trade deficit reach $77.2 billion in October, slightly higher than September.
- The housing sector continues to stall as new home sales dipped 8.9% in October following a 1.0% drop in September. For the 12 months ended in October, new home sales are down 12.0%.
EYE ON THE WEEK AHEAD