Last week's action snapped a six-week winning streak for equities although the losses were minor and trading volume was low. The low volatility environment the market has experienced for a full month now supports a continued rise in equity prices that I still expect to continue through to the beginning of 2020. In January, I think traders will begin reassessing the underlying economic environment and look at selling again.
Treasury bond yields are back below 1.8% which suggests that investors haven't been ignoring the weak underlying backdrop of the U.S. economy. We'll get a lot of economic data this week, including home sales, personal income & spending and the latest Q3 GDP estimate. Given the holiday-shortened weak, I don't expect this to move the markets too much but it could give us a good sense of where the markets are headed in 2020.
Precious metals are still looking weak across the board. Gold is back around $1450 and I still believe it'll make a further move down towards $1400 or lower before it reverses course in 2020. Palladium is at an interesting spot right now but I'd probably avoid most precious metals for the time being.
Here is the full scorecard for the week ahead.