Market News – January 27, 2020

I COULD NOT HAVE SAID IT BETTER MYSELF:  I read an article by Paul Merriman on MarketWatch’s website this week.  The title was “The No. 1 Secret to Long-Term Investment Success.”  Before you read on, stop and see if you can think of what he says it is……Okay, time’s up.  He says, “The key to long-term success is to pick a good strategy and then establish a lifetime commitment to maintain that strategy regardless of what’s going on at the moment.”

STOCK PAUSE FOR CORONAVIRUS AND IMPEACHMENT TRAIL:  Stock markets worldwide were rattled by the coronavirus.  China led the way with severe decreases in stock prices as investors tried to assess the early news of what we all hope is not going to be a major outbreak, either domestically in China or worldwide.  Those fears seemed to calm as the week wore on and then pick up steam again.  The China/U.S. trade deal is going to take a back seat in investors’ minds until this plays out.  Impeachment took center stage as well taking some of the oxygen out of the room for normal news cycles.  Market fundamentals did force their way in however as mixed December U.S. corporate earnings reports kept stocks seesawing with some stocks having a good week but overall markets decreased.

U.S. EXISTING HOME SALES END 2019 ON A STRONG NOTE:  Sales of previously owned homes increased 3.6% in December compared with November.  December sales were 10.8% higher than a year earlier.  That is giving the housing market momentum going into 2020, especially with the economy continuing to grow and borrowing rates remaining attractive. The average interest rate on a 30-year fixed mortgage was 3.65% as of Jan. 16, down from 4.45% a year ago (Freddie Mac).

EUROPE STUMBLING OUT OF THE 2020 GATE:  With the U.S. signing trade deals with China and its North American neighbors, 2020 has begun with economic optimism for the economies of those regions.  What about Europe?  According to the International Monetary Fund, the European economy grew in 2019 at its slowest pace since the Great Recession, and it will see only a modest rebound this year.  It is not clear that the China/U.S. trade deal will have much of a positive effect on Europe, at least not right away.  And, now that tensions with China have abated, will the U.S. administration get aggressive with tariffs with Europe to force trade reform?  There have already been signs that we might see that in 2020.  Stay tuned.

REFERENCES:

I COULD NOT HAVE SAID IT BETTER MYSELF:  https://apple.news/Aa9BrnZeUR_i*DkdM8QHIJQ
U.S. EXISTING HOME SALES END 2019 ON A STRONG NOTE:  https://www.wsj.com/articles/u-s-existing-home-sales-wrapped-up-2019-on-solid-note-11579705351
EUROPE STUMBLING OUT OF THE 2020 GATE: https://www.wsj.com/articles/europe-remains-a-weak-spot-for-the-global-economy-11579861052?mod=hp_lead_pos4