Weekly Market Update October 21, 2019

What happened?  

The week began with positive trade news in the U.S. and Europe that positioned equities for a positive move by reducing threats of a global economic slowdown and political turmoil.

The Americans and Chinese negotiators decided that rounds of agreements, each with a limited number of issues and areas, would be a more attainable treaty system than a single large agreement.  This was announced along with the first small agreement and delays to impending restrictive moves on both sides.

British Prime Minister Boris Johnson successfully negotiated a Brexit deal with the European Union’s leadership in Brussels.

By the end of the week and weekend much had changed to reverse or dampen the positive progress these two major agreements provided:

Trump’s decision to remove troops from northern Syria prompted a Turkish invasion with devastating effects to the Kurdish population and to international diplomacy.  Impeachment inquiry progress continued with a wider net being cast to gather information and now involves those within Trump’s inner circle.

Johnson was unsuccessful back at home with his own Parliament and with the Democratic Unionist Party in Northern Ireland, and it appears that he must return to the EU to ask for another extension, past the October 31st deadline

What’s ahead for this week?

In Canada, it is a light week for economic releases with only retail sales and wholesale trade sales for August scheduled for release. 

Most importantly, Monday, October 21st is election day.  The results of the election and who forms the next government by majority, by minority or by coalition could guide economic and fiscal policy for the next five years.

In the U.S., it isn’t much busier with housing numbers (existing home sales and new home sales), durable goods orders for September to be released. 

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