After weeks of high volatility and many down days, traders may have gotten a break this week as the combination of positive trade news, lower rate expectations and international stimulus efforts took hold. Less-than-expected data helped boost analysts’ expectations that the Federal Reserve will act before the end of the month and cut rates. Meanwhile, the trade war could finally be cooling down. Several positive pieces of news including an agreement on agricultural products and the resumption of talks between China and U.S. also helped spur stocks higher over the course of the week. Finally, action from the ECB and other central banks overseas boosted confidence that policymakers are working hard to stem the pending global recession.
Economic data also proved to be bullish, especially on the consumer side. Consumer and employment numbers have continued to drive the U.S. expansion. This week was no different as consumers continued to open up their wallets as well as borrow at a fast pace. Other measures such as inflation and manufacturing data were also on the mark.
Elsewhere, various corporate actions – including plenty of activist involvement – and key retail/bellwether earnings managed to keep the animal spirits alive over the last week. In the end, the combination of all the positives managed to help boost equities and move the markets higher.
Be sure to check out our previous Wrap here, where the week was short yet volatile.