Overview: Stocks ended the holiday-shortened week of Thanksgiving in positive territory despite increased U.S.-China trade risk. After President Trump signed a bill supporting Hong Kong’s protesters, worries grew concerning a China retaliation against the U.S. The S&P 500 Index finished the week up 1%, and global stocks were in positive territory for the week as well. U.S. Treasury yields were stable, with the U.S. 10-Year and 2-Year notes closing the week at 1.77% and 1.62% respectively. Yields have traded in a narrow range of late, with the expectation that the Federal Reserve is on hold with respect to the current fed funds level of 1.75%. Interest rate levels are about 1% lower across the yield curve since the beginning of 2019. Overall, the yield on the Bloomberg Barclays U.S. Aggregate Bond index has fallen to 2.3% from 3.28% at year-end 2018.
This week: With holiday shopping in full swing, we expect markets to focus on three key events: Brexit, consumer spending, and U.S.-China trade negotiations. As the Brexit saga continues, U.K. voters will vote on December 12 in a general election that may have implications for the coming January deadline for Britain to leave the European Union. On the consumer front, investors will keep an eye on holiday spending. In the weeks between Thanksgiving and Christmas last year, U.S. consumers shelled out a record $850 billion at stores and online. Early estimates forecast total U.S. retail sales will climb 3.8% to $1.008 trillion this season, making it the first-ever trillion-dollar holiday season, while U.S. retail ecommerce spending will rise 13.2% to $135.35 billion (eMarketer). In economic data, this week will bring reports on manufacturing and the service sector, construction spending, car sales, factory orders, consumer credit and the labor market. The highlight will be the November jobs report, due out Friday.

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