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Weekly Financial Update - January 3, 2020

Christopher LaPorta

January 6, 2020

The S&P 500 finished 2019 with a 31.5% total return, its best year since 2013. Global equities resumed their march higher on the first trading day of the New Year as many equity indexes rallied close to 1.0% or more. Equity markets received support from President Trump announcing that a phase one trade deal with China will be signed on January 15, and China’s central bank unveiled new stimulus. The People’s Bank of China (PBOC) reduced the amount of deposits that banks are required to keep in reserves by 0.5%. The PBOC’s move will free up around $115 billion for lending.

Equities’ rally to start the year came to an abrupt end on Friday after a U.S. airstrike on Thursday killed one of Iran’s top military leaders, Major General Qassem Soleimani. The airstrike jolted tensions in the Middle East and weighed on investors’ risk appetite. Increased demand for safe haven assets led stocks to retreat and drove yields on the 10-year U.S. Treasury bond to a one-month low, below 1.80%. Meanwhile, the price of gold rose over 1.5% to a four-month high of $1,553 per ounce. 

Learn more in our Weekly Financial Market Update.