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US Month in Markets - November 2019

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Market Summary

Index Returns - November 2019

Economic Surprise

The index measures economic data relative to expectations. A positive number indicates that economic data has outperformed expectations. 

Key News and Events

  • Resurgent optimism over a U.S.-China trade truce boosted equity markets in November, with the S&P 500 index reaching new all-time highs over the month. Fears of a global slowdown were soothed by generally positive economic data releases, whilst expectations of accommodative monetary policies from major central banks provided further support for risk assets.
  • U.S. and Chinese officials stated that a "phase one" trade deal is progressing well, as negotiations continue over potential sticking points such as intellectual property rights and market access rules. The Chinese Commerce Ministry announced that some of the previously implemented tariffs would be rolled back as part of any deal, although the extent of any tariffs rollback is unclear after President Trump declined to confirm the announcement. Whilst the phase one deal was originally scheduled to be completed by mid-November, this deadline was abandoned after civil unrests forced Chile to cancel a summit where Presidents Trump and Xi were due to meet.
  • UK and Germany avoided a technical recession in Q3, growing by 0.3% and 0.1% respectively to avoid recording two consecutive quarters of negative growth. However, the UK economy grew at the slowest annual rate in nine years, whilst Germany's surprise return to growth in Q3 was dampened by a downward revision to its Q2 growth reading.
  • Protests in Hong Kong escalated further amidst intensifying clashes between police and protestors around the city. Meanwhile, President Trump signed the Hong Kong Human Rights and Democracy Act into law after the bill passed Congress with veto-proof majorities. China’s foreign ministry condemned the bill and threathened to retaliate against the U.S. with "strong countermeasures".
  • The Spanish election in November, the fourth election in four years, again failed to break the political impasse as no party was able to gain a majority. Meanwhile, UK Prime Minister Boris Johnson's Conservative party continued to hold a substantial lead in opinion polls ahead of the general election on 12 December.

Market Highlights


  • Global equity markets rose over the month, benefiting from easing U.S.-China trade tensions, positive economic data releases, and a spate of new takeovers.
  • The S&P 500 index rose by 3.6% over the month, outperforming the MSCI World index, which rose by 2.8%. On a year-to-date basis, S&P 500 index outperformed the MSCI World index (27.6% vs 24.6%), putting U.S. equities on course for their best annual performance since 2013.
  • U.S. Large Cap stocks underperformed Small Cap stocks over the month, as the S&P 500 index rose by 3.6% while the Russell 2000 index rose by 4.1%.
  • Growth stocks outperformed Value stocks over the month as measured by the MSCI USA Growth and Value index. Growth Stocks rose by 4.5% while Value Stocks rose by 3.0% over the month.


  • Improving risk appetite helped drive yields higher over the month, as easing fears over global trade and positive economic data releases led to reduced demands for "safe haven" bond assets.
  • The 10-year U.S. treasury yield rose by 9bps to 1.78% and 30-year U.S. treasury yield rose by 2bps to 2.20% over the month. Meanwhile, the 20-year TIPS yield fell by 2bps to 0.35% and 20-year breakeven inflation rose by 9bps to 1.72% over the month.
  • Credit also performed well, benefiting from a general "risk on" environment. The spreads on the Bank of America Merrill Lynch U.S. Corporate Index fell by 6bps to 111bps and the spreads on the Bloomberg Barclays Long Credit Index fell by 7bps to 154bps over the month.
  • The U.S. High Yield bond spread over U.S. treasury yields fell by 14bps to 401bps and the spread of USD denominated EM debt over U.S. treasury yields fell by 5bps to 332bps over the month.


  • Commodities were flat over the month, as gains in the energy sector were offset by losses in industrial metals and precious metals. The S&P GSCI index was unchanged in USD terms over the month.
  • The S&P GSCI Energy index rose by 1.0% as the price of WTI crude oil rose by 1.8% to US$55/BBL.
  • Industrial Metal prices fell by 2.7% as copper prices rose by 0.5% to US$5,854/MT.
  • Agricultural prices fell by 0.1% and gold prices fell by 3.4% to US$1,460/Oz.


  • The U.S. dollar appreciated against most major currencies over the month.
  • Sterling remained unchanged against the U.S. dollar over the month, ending the month at $1.29/£. The euro depreciated by 1.2% against the U.S. dollar over the month, ending the month at $1.10/€.
  • The Japanese yen depreciated by 1.3% against the U.S. dollar over the month, ending the month at ¥109.51/$, whilst the Canadian dollar depreciated by 1.0% against the U.S. dollar over the month, ending the month at C$1.33/$.

Highlighted Economic Release

China Manufacturing PMI (December 1)
China's official manufacturing PMI rose by 0.9 points to 50.2 in November, indicating the first expansion in manufacturing activities in seven months. The Caixin Manufacturing PMI, which focuses on smaller private sector manufacturers, rose to a near three-year high of 51.8.

U.S. GDP Growth (Revised) (November 27)
GDP growth in the third quarter was revised up by 0.2% to an annualized rate of 2.1%. Upward revisions to consumer spending and inventory investment boosted growth, whilst a downward revision to government spending detracted.

Markit U.S. Manufacturing PMI (November 22)
The U.S. Manufacturing PMI rose by 0.9 points to 52.2 in November, outperforming market expectations of a 0.1-point increase. This is the sharpest growth in factory activity since April, supported by strong expansions in production and new orders.

German GDP Growth (November 14)
The German economy unexpectedly avoided a recession after growing by 0.1% in the third quarter. Analysts have been expecting a second consecutive quarter of contraction to follow up the -0.2% growth recorded in Q2. Increased spending by consumers and the public sector benefited the economy, offsetting the impact of a weakening manufacturing sector.

UK GDP Growth (November 11)
The UK economy grew by 0.3% in Q3, avoiding a recession and recovering from the 0.2% contraction recorded in the previous quarter. The services sector grew by 0.4% over the quarter, benefiting from strong performances of the healthcare and finance sectors, whilst the manufacturing sector remained flat. Year-on-year, the economy grew by 1.0%, the lowest annual growth in nine years.

University of Michigan U.S. Consumer Sentiment (November 8)
Consumer sentiment inched up in November, increasing by 0.2 points to 95.7 to record the highest reading in four months. However, it underperformed market expectations of 95.9. A more positive outlook by consumers on the state of the economy was offset by a less favourable outlook on their personal finances.

Bank of England Bank Rate (November 7)
The Bank of England’s Monetary Policy Committee (MPC) voted to leave interest rates unchanged at 0.75% last week with two of the nine MPC members voting for a rate cut in the first split decision since June 2018. The Bank also cut its growth forecasts, reflecting a weaker global backdrop and the projected economic effects of the revised Brexit deal.

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Appendix: Index Definitions

  • S&P 500 Index – The market-cap-weighted index includes 500 leading companies and captures approximately 80% of available market capitalization.
  • Russell 2000 Index - The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
  • MSCI World Index - A free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets, representing 24 developed market country indices.
  • MSCI USA Value/Growth - The MSCI USA Value/Growth Index captures U.S. large and mid cap securities exhibiting overall value/growth style characteristics. The value investment style characteristics for index construction are defined using three variables: book value to price, 12-month forward earnings to price and dividend yield. The growth investment style characteristics for index construction are defined using five variables: long-term forward EPS growth rate, short-term forward EPS growth rate, current internal growth rate and long-term historical EPS growth trend and long-term historical sales per share growth trend.
  • Bank of America Merrill Lynch U.S. Corporate Index - An unmanaged index considered representative of fixed-income obligations issued by U.S. corporates.
  • Bank of America Merrill Lynch U.S. High Yield Index - An unmanaged index considered representative of sub-investment grade fixed-income obligations issued by U.S. corporates.
  • Bloomberg Barclays U.S. Government Index - An unmanaged index considered representative of fixed-income obligations issued by the U.S. government.
  • Bloomberg Barclays Long Credit Index - An unmanaged index considered representative of long duration fixed-income obligations issued by U.S. corporates.
  • S&P GSCI – A world-production weighted index that is based on the average quantity of production of each commodity in the index.
  • JPMorgan EMBI Global Diversified – An unmanaged index considered representative of USD denominated fixed-income obligations issued by the emerging market government.

Appendix: Data Disclaimers

BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively "Bloomberg"). BARCLAYS® is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, "Barclays"), used under license. Bloomberg or Bloomberg's licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). © LSE Group [year]. FTSE Russell is a trading name of certain of the LSE Group companies. “FTSE®” “Russell®”, “FTSE Russell® are a trade mark(s) of the relevant LSE Group companies and is/are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.

The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices.  None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information.  MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information.  Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (


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