Favorable Noise | December 3, 2019


photo of owner Jay Roque Financial Services-time and money icon Financial Future Services Monument Colorado AUTHOR: Jason J. Roque, CFP®, APMA®

TITLE:       Investment Adviser Rep – CCO

TAGS:      Trade, Japan, Europe

Most of the moves over the last week were motivated by favorable trade circumstances. Is it background noise or the real reason for growth?

US/China Trade

The trade dispute between the US and China took a major step forward and backward last week. Concessions regarding intellectual property were agreed to by China. This has been a central theme of US demands throughout the dispute. The major step backward is still to be determined as China vowed to retaliate for Trump signing off on the Hong Kong human rights bill.


Continued accommodation is being recommended by the International Monetary Fund (IMF). At the same time, they are recommending a ratcheting of sales taxes over the next decade, that would likely be impossible in the face of another recession. The Bank of Japan affirms that they are still in an accommodative stance, but they have suffered a 14% fall in consumption since raising the sales tax from 8% to 10%.


Consumer sentiment in Germany rose for December. Given recent weakness in the German economy, optimism is welcome. Economic strength is needed as another negative quarterly GDP reading would put Germany in a recession. The UK is preparing for a general election on December 12th and the conservatives hold a strong lead. This is a decidedly pro-Brexit indication. This means the deal currently brokered with the EU would likely pass and the UK would leave the EU 1-31-2020.


The weeks economic data was light. New Homes sales fell slightly, as did CB consumer confidence. The lone bright spot was improved core durable goods orders. With the data not in support of market moves trade truly carried the week. It may be serving as a decent distraction until corporate spending returns. It has provided some favorable noise in the mean time.

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Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services. Broad diversification across several asset classes with a long-term holding strategy is the best strategy in any market environment.

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