Market Perspective for December 9, 2019

Equities traded in a tight range on Monday, with the S&P 500 Index slipping 0.32 percent.

Consumer sectors were the best performers on the day. SPDR Consumer Discretionary (XLY) rallied 0.12 percent and SPDR Consumer Staples (XLP) 0.08 percent.

The U.S.-China trade talks will take centerstage over the coming days. If the two countries cannot finalize a deal by the December 15 deadline, the U.S. could raise tariffs on Chinese imports. Expect higher volatility from Chinese-related stocks, particularly if there’s no indication of a deal.

The National Federation of Independent Business releases its small business confidence index for November on Tuesday.

Inflation data and retail sales are out later in the week. Economists predict consumer prices, core CPI and producer prices all increased 0.2 percent in November. They see retail sales climbing 0.5 percent and 0.4 percent ex-autos.

China will release several key data points this week including inflation and lending for November, followed by industrial data on Sunday night.

On Thursday, the United Kingdom votes in a general election. Polling is tightening, though current Prime Minister Boris Johnson maintains a six-point advantage. A comfortable victory by Johnson would give him the votes to complete a Brexit deal with the European Union. A resolution would lift the cloud of uncertainty that has been hanging over the country since 2016. iShares MSCI United Kingdom (EWU) gained 0.12 percent.

Crude oil held near $59 per barrel on Monday, slightly below Friday’s close. Last week, OPEC agreed to cut production by 500,000 barrels per day. SPDR Energy (XLE) fell 0.12 percent.

This week is light on earnings. MongoDB (MDB) and Toll Brothers (TOL) both beat earnings forecasts on Monday, sending shares higher after hours.

The headliners this week are Broadcom (AVGO), Adobe Systems (ADBE), Oracle (ORCL), Costco (COST) and Ciena (CIEN), all on Thursday. Other companies reporting this week include Ollies Bargain Outlet (OLLI), GameStop (GME), Conns (CONN), Lululemon (LULU) and American Eagle Outfitters (AEO).


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