The Dow hit a new record high last week, and the major benchmark indexes posted solid gains as investors received encouraging news on the trade front. Both the United States and China sent signals out that an initial trade agreement would be signed in the near future, marking the first phase of the trade deal between the economic giants. As money flowed into stocks, long-term bond prices fell, pushing yields higher. For the week, the S&P 500 posted its fifth straight week of gains, while the Nasdaq advanced for the sixth consecutive week. The largest gainer last week was the Global Dow, which climbed over 1.50%.
LAST WEEK’S ECONOMIC HEADLINES
- The goods and services trade deficit was $52.5 billion in September, according to the latest report from the Bureau of Economic Analysis. The deficit in September was down $2.6 billion from August’s total. September exports were $1.8 billion less than August exports, while imports in September were $4.4 billion under the prior month’s figure.
- The services sector of the economy continues to outpace the manufacturing sector. According to the latest report from the Institute for Supply Management, the October Non-Manufacturing Index increased 2.1 percentage points above its September reading.
- The Bureau of Labor Statistics reported last week that the number of job openings fell 277,000 (3.8%) in September from the prior month. In September, the number of hires increased slightly (+50,000), as did the number of separations (+76,000).
EYE ON THE WEEK AHEAD
Inflation indicators are available this week with reports on consumer prices, producer prices, retail sales, and import and export prices. Inflation has been running lower than the Fed’s 2.0% target rate for much of the year. Also, the Federal Reserve’s report on industrial production is out this week. Manufacturing production was off in September, pulled down by weakening demand for U.S. exports.