Bassanese Bites: Off Again On Again – December 9 2019

Global equities got off to a poor start last week thanks to Trump’s decision to impose  tariffs on (small fry) Brazil and Argentina, a weaker than expected US manufacturing survey and – most critically of all – reports that Trump was relaxed about not concluding a trade deal with China until next year.

But just as tensions rose, market hopes quickly returned, with new reports suggesting the all important China trade deal was still close. And the week was capped off with a “Goldilocks” US payrolls report revealing stronger than expected employment growth (266k), yet still broadly benign wage growth (annual growth in average hourly earnings eased back to 3.1% from 3.2%). Overall, the S&P 500 finished the week up 0.2%, and a hair’s breadth from the previous week’s record high.

Encouragingly, manufacturing reports in China and Europe were also generally a bit better than expected – again consistent with the view that global growth is finally stabilising after a two-year slowdown.

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