Weekly Market Commentary

A weekly roundup of the latest developments in financial markets and global economies.


09 Dec 2019

Key Highlights

Economic fundamentals stole the spotlight from trade-deal expectations last week, driving global stocks higher.
The state-controlled Saudi Arabian Oil Company, commonly known as Aramco, raised $25.6 billion late in the week in the world’s largest initial public offering (IPO).


Developed Markets
Key Indices 6-Dec-19 1w 3m YTD 1y
S&P500 3,146 0.2% 5.6% 25.5% 16.7%
DJIA30 28,015 (0.1%) 4.5% 20.1% 12.3%
EuroSTOXX 3,692 (0.3%) 5.6% 23.0% 21.2%
DAX 13,167 (0.5%) 8.0% 24.7% 21.8%
FTSE 7,240 (1.5%) (0.6%) 7.6% 8.0%
Emerging Markets
Key Indices 6-Dec-19 1w 3m YTD 1y
Brazil 111,126 2.7% 8.0% 26.4% 25.1%
Russia 1,634 0.6% 8.5% 21.2% 10.6%
India 11,922 (1.1%) 8.9% 9.7% 12.5%
China 2,912 1.4% (2.9%) 16.8% 11.8%
South Africa 55,307 (0.1%) (0.5%) 4.9% 8.9%
United States
The major benchmarks ended mixed for the week after a strong jobs report helped compensate for worrisome signals on the trade front. The smaller-cap benchmarks fared best for a second consecutive week.
Within the S&P 500 Index, the consumer staples sector outperformed, helped by a rise in Procter & Gamble shares. Industrial stocks lagged, weighed down by a decline in Boeing as the plane-maker continued to lose sales to Airbus amid uncertainties over the troubled 737 Max airliner. The transportation segment was generally weak, with UPS, FedEx, and United Airlines shares all recording losses.
In moderate volumes, 850 million shares were traded on the NYSE and 2.0 billion shares changed hands on the Nasdaq.
The UK & European Union
European stocks ended the week flat, recouping earlier losses sparked by fears that a U.S.-China trade deal might be delayed until after the U.S. 2020 election.
The pan-European STOXX Europe 600 Index ended the week flat, Germany’s exporter-heavy DAX index fell 0.5%, and the UK’s FTSE 100 Index dropped 1.6%. UK stocks tend to decline when the pound rises because many index companies are multinationals with overseas revenues.
Emerging Markets
Chinese stocks advanced, snapping three straight weeks of losses, as investors sensed that an interim U.S.-China trade deal was close at hand. For the week, the benchmark Shanghai Composite Index rose 1.4%, and the large-cap CSI 300 Index, which tracks blue chips listed on the Shanghai and Shenzhen exchanges, added 1.9%.
Shares in Brazil, as measured by the Bovespa index, rallied approximately 2.8% for the week. The market was largely unaffected by U.S. President Trump’s threat to reimpose steel tariffs on Brazil (and Argentina) in response to their “massive” currency devaluations, as Brazil’s steel exports to the U.S. represent only about 0.1% of its gross domestic product (GDP).
Stocks in Chile, as measured by the IPSA Index, rose about 4.1% for the week. Shares rebounded from early weakness as the Finance Ministry—following the release of data showing that Chile’s economy contracted 3.4% year-over-year in October—announced an economic stimulus package worth about USD $5.5 billion.


Credit Levels*
Key Indices 6-Dec-19 1w 3m YTD 1y
iTraxx Mains 47 48 47 87 87
iTraxx Fin 55 57 57 109 111
iTraxx X-Over 220 221 239 353 347
CDX IG 49 50 51 88 79
CDX HY 322 326 327 449 409
Yield Curves
Key Indices 6-Dec-19 1w 3m YTD 1y
2-yr US Treasury 1.61 1.61 1.54 2.49 2.76
10-yr US Treasury 1.84 1.78 1.56 2.68 2.90
30-yr US Treasury 2.28 2.21 2.03 3.01 3.16
10-yr German Bund -0.29 -0.36 -0.64 0.24 0.24
10-yr UK Gilt 0.77 0.70 0.51 1.28 1.25

* On the Run Levels (bps)

United States Credit
Treasuries fell following the employment data. The yields on the 2-year note and the 30-year bond rose 2 basis points (bps) to 1.61% and 2.28%, respectively. The yield on the 10-year note is gained 3 bps to 1.84%.
Investments in the investment-grade corporate bond market seemed somewhat risk averse early in the week due to the renewed trade tensions and equity market weakness. There were high volume of new deals, and the primary calendar was expected to remain active as dealers make a final issuance push before year-end.
European Credit
Euro zone government bond yields were little changed on Friday, but set for their biggest weekly rise in a month, with investors continuing to take their cue from U.S.-China trade talks.
Germany’s 10-year Bund yield, little changed on Friday at -0.29%, is up 6 basis points this week and set for its biggest weekly jump in a month. U.S. and Italian bond yields are also set for their biggest weekly rises in a month.

Currencies & Commodities

Key Indices 6-Dec-19 1w 3m YTD 1y
EUR 1.11 1.10 1.10 1.15 1.14
GBP 1.31 1.29 1.23 1.28 1.28
AUD 0.68 0.68 0.68 0.70 0.72
YEN 109 109.49 106.92 109.69 112.68
Key Indices 6-Dec-19 1w 3m YTD 1y
Crude (Brent) 65.5 6.7% 5.3% 23.1% 10.5%
Crude (WTI) 59.2 7.3% 4.7% 30.4% 15.0%
Gold 1,460 (0.3%) (3.1%) 13.9% 18.0%
Silver 16.6 (2.7%) (8.8%) 7.0% 14.5%

** w.r.t. USD

Currencies and Commodities
The UK pound rose to a seven-month peak against the U.S. dollar and the euro, marking its highest level under Prime Minister Boris Johnson. The pound’s recovery came as opinion polls showed the ruling Conservative Party was maintaining a comfortable lead ahead of the December 12 general election.
WTI crude oil added $0.77 to $59.20 per barrel and wholesale gasoline was $0.03 higher to $1.65 per gallon. Elsewhere, a gold spot price was $18.10 lower at $1465.10 per ounce

Economic Calendar

Week In Review
Economic Indicator Release Date Actual Consensus
US Initial Jobless Claims 05-Dec-2019 203k 215k
US Change in Non-farm Payrolls 06-Dec-2019 266k 188k
Week Ahead
Economic Indicator Release Date Consensus Prior
CPI YoY US 11-Dec-2019 1.8% 2.0%
US Initial Jobless Claims 12-Dec-2019 212k 203k


This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. This material is not financial research and was not prepared in compliance with applicable provisions of law designed to promote the independence of financial analysis. Investors are urged to consult with their financial advisors before buying or selling any securities. This information may not be current and Oxane Partners has no obligation to provide any updates.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. The information contained in this presentation is not intended to be used as a general guide to investing, or as a source of any specific investment recommendation.Views and opinions expressed are for informational purposes only and do not constitute a recommendation by Oxane Partners to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice. Sources used for preparing the report: Bloomberg; Wall Street Journal, Financial Times, Thomson Reuters