December 20 2019 – As published in Wall Street Journal

By Karen Langley

U.S. stocks closed out the week at records, powered higher by new signs of economic strength
that have followed a calming in trade tensions.

Major U.S. indexes have bounded higher since the U.S. and China agreed last week to a
preliminary trade truce, dialing back a major source of economic concern. Further boosting
sentiment: promising economic reports in both countries that have eased fears of a global
slowdown

With the trade agreement, improving economic signals and an expectation that the Federal
Reserve will hold interest rates steady, investors who had sold out of stocks are reversing
course, said Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment
Management.

“Nothing gets people back in like a rising market,” Mr. Slimmon said. “The fear of missing out is
alive and well.”

Major U.S. indexes bolstered by signs of economic strength and easing trade tensions
Stock gains Friday were broad-based, with all 11 S&P 500 sectors rising.

The S&P 500 added 1.7% for the week, while the Dow Jones Industrial Average gained 1.1%. The
tech-heavy Nasdaq Composite ended the week up 2.2%.

All three indexes notched fresh record closes Friday, climbing from Thursday’s previous alltime
highs. The Nasdaq Composite marked its seventh consecutive record, its longest such
streak since the seven record closes ending Feb. 15, 2017, according to Dow Jones Market Data.

The S&P 500 gained 15.85 points, or 0.5%, to 3221.22. The Dow Jones Industrial Average added
78.13 points, or 0.3%, to 28455.09. The Nasdaq Composite rose 37.74 points, or 0.4%, to 8924.96.
Investors have been heartened by signs that the global economy is regaining some of its
footing. New data earlier in the week showed that U.S. business activity improved to a five-month
high in December and that China’s industrial output and consumer spending accelerated
in November.

In another positive economic report, U.S. household spending rose in November, a sign that a
key driver of the economy remained solid heading into the end of the year. The Commerce
Department said Friday that personal-consumption expenditures rose a seasonally adjusted
0.4%, while personal income increased 0.5%, a greater income gain than expected by
economists surveyed by The Wall Street Journal.

The new personal income numbers “are consistent with a consumer that is going to carry this
economy forward,” said Jeanette Garretty, principal and managing director at Robertson
Stephens Wealth Management. “I think the market is anticipating that we will go into 2020
with many fewer concerns and a continuation of economic growth.”

U.S. stocks have soared this year, due in part to a shift to lower interest rates and to signs of
progress in trade negotiations. The S&P 500 has advanced 28% in 2019, while the Nasdaq
Composite has jumped 35%.

Friday’s gains were broad-based, with all 11 S&P 500 sectors rising, led by energy, health care
and utilities.

Earnings sparked some of the biggest moves in individual companies. Shares of CarMax fell
$6.08, or 6.2%, to $92.71 after the company reported lower third-quarter profit amid higher
compensation and advertising expenses. Winnebago Industries rose $3.77, or 7.8%, to $51.91
after the recreational-vehicle manufacturer’s revenue and adjusted earnings beat analysts’
expectations.

Overseas, the Stoxx Europe 600 index climbed 1.5% for the week, while the Hang Seng
Index ended the week up 0.7%.

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