by Connor Darrell CFA, Assistant Vice President – Head of Investments
Most of last week’s action took place on Friday, when the first signs of meaningful progress toward an eventual trade resolution between the U.S. and China broke into the news cycle. Markets rallied in reaction to the announcement from President Trump that he and Chinese officials arrived at an agreement for China to resume purchases of U.S. agricultural products and to begin addressing issues related to intellectual capital. Ultimately however, many were quick to point out that while the progress is a sign that the two sides are willing to work with one another, this first phase of an agreement is far from a finished product and does not address the most pressing issues that face negotiators; many of which are related to technology, cybersecurity, and intellectual property theft.
The positive sentiment from the trade front pushed a sense of optimism through financial markets and helped to steepen the yield curve, which led to negative returns in the bond market. With the economic calendar dormant this coming week, most of the market’s focus will remain on geopolitical concerns like trade and Brexit negotiations, as well as the beginning of Q3 corporate earnings season, which could provide investors with a better glimpse into how the recent slowdown in manufacturing has impacted corporate profits.
We provide our perspective on many of the above issues in our most recent quarterly commentary, which is available on our website – valleynationalgroup.com/Q32019