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Market Recap week ending 8/30/2019

-Darren Leavitt, CFA

After four straight weeks of declines, US markets rallied in the last week of August.  The prior week’s escalation of trade tariffs between the US and China took a bit of a siesta last week. Early in the week, Trump claimed that Chinese negotiators had called and expressed a desire to reopen talks.  Despite Trump’s claim being denied, China came out later in the week with a statement indicating they hoped negotiations would restart and be “calm” and further that they would not immediately retaliate with additional tariffs based on Trumps latest tariff increases.  All that said, the more constructive tone helped markets rally.  Additionally, month-end rebalancing also likely aided the rally.  The S&P 500 gained 2.8%, the Dow led US averages- forging a 3% increase, the NASDAQ added 2.7%, and the Russell 2000 notched a 2.4% gain.

The US Treasury market ended the week little changed.  The 2-year note yield fell three basis points to close at 1.50 while the 10-year bond yield fell one basis point to close at 1.51.  Of note, the 30-year bond yield fell below 2% during the week- and hit a record low yield of 1.94% before settling at a yield of 1.97% on Friday.  Gold lost ~$10 on the week to close at 1529.70 an Oz and Oil gained 1.7% to close at $55.06 a barrel.  We did have a couple of slight changes to the Core Satellite models last week.  We sold out of our emerging bond exposure and trimmed a little bit off our S&P position and put the proceeds into mid-duration bonds.  Please let us know if you have any questions regarding these changes.

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