Equities surged following comments by Federal Reserve chairman Jerome Powell that the current benchmark rate was "just below" neutral, implying the central bank could be close to leaving interest rates steady. As recently as last month, Mr. Powell had said rates were "a long way" from neutral. Along with tariffs, fears of higher interest rates, which could lead to slower growth, remains another key concern for most investors. During the week, trade headlines continued to add volatility to the market in the lead up to Presidents Donald Trump and Xi Jinping meeting this weekend. In economic news, housing numbers remained disappointing as new home sales came in under expectations for October and continued to soften. Rising costs due to material and labor shortages coupled with higher interest rates have driven down home affordability. In stock news, General Motors Co. made headlines and felt the ire of President Trump's Twitter account after announcing a 15% reduction in its North American salaried workforce and the closure of three plants. Shares of Salesforce.com, Inc. jumped following a strong quarterly announcement that resulted in 27% growth in billings as clients are integrating and signing up for additional solutions.; Workday Inc. also posted impressive results and raised guidance for the full-year on broad-based strength across regions, product line and size of client. Looking ahead, all focus will be on this weekend's dinner at the Group of 20 where Presidents Donald Trump and Xi Jinping will be in attendance. If no resolution is reached soon, 25% levies are set to be placed on Chinese goods starting January 1st. Takeaways from the meeting this weekend are likely to drive sentiment for the week ahead.
Posted on Monday, December 3, 2018 @ 8:27 AM
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