9/27/19 – Stocks Down 2nd Straight Week

Stocks pulled back in the last full week of September. Concerns over potential impeachment and what it means for the economy and a Chinese trade deal drove trading this week. Chinese trade negotiators are scheduled to meet US officials on October 10th. Interestingly, reports came out today that the Trump administration is considering limiting US investors from being able to invest in Chinese companies. While details are scarce, this could include disallowing Chinese companies to list on US stock exchanges and preventing US investors from buying stocks on the Chinese exchanges. There are approximately 160 Chinese companies listed on US exchanges and another 70 Hong Kong companies trading on US exchanges. The US is the deepest and most active financial market and Chinese companies would definitely want to remain listed in the US. The administration is suggesting this to ‘protect’ US investors since Chinese companies aren’t very transparent and have different reporting standards in the first three years they are listed in the US. It’s hard to know whether this will help the trade negotiations, but it seems like another questionable idea from the Trump administration on dealing with China. For the week, the Dow was down 0.4% while the S&P 500 declined 1.0%. Read More

Oil decreased 3.3% this week to close at $56.18/barrel. Oil has given up most the up moved following the Saudi Aramco oil field attacks. The yield on the 10-yr Treasury moved lower, closing at 1.68%, from 1.73% last week. The average rate on a 30-yr fixed rate mortgage moved lower to 3.64% from 3.73% last week.     

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