 The Market Sum | Insight after the bell
By Caleb Silver, Editor in Chief 
Friday's Headlines 1. U.S. markets manage slight gains on mixed messages on trade deal 2. U.K. Prime Minister Johnson wins majority in parliamentary vote 3. The U.S. considers new tariffs on EU imports including cognac 4. The best performing stock over the past 30 years 5. What to expect next week Markets Closed
Year-to-Date
 Credits: John P. Johnson / HBO Markets Today U.S. markets were set to scream out of the gate this morning following big gains in Asian and European markets. Global investors cheered the news that the U.S. and China had agreed in principle to Phase One of a broader trade agreement. Then, this happened 15 minutes before the U.S. market opened.  U.S. markets fell at the open as the enthusiasm around the trade deal evaporated, leaving many to wonder where the signals got crossed. Then, at 10am ET, Chinese officials held a press conference in Beijing and basically announced that there was an agreement on phase one of the trade deal with the U.S., under the same terms that the WSJ and others reported yesterday.
Then this happened:  It was a confusing day, but the bottom line is that new tariffs on $156 billion in Chinese goods set to go into effect this Sunday will no longer happen, and existing tariffs on $120 billion will be halved. The 25% tariffs on $250 billion worth of Chinese imports will remain in place. Trade representatives from both countries said they would work to reach an agreement on phase two of a broader deal by January, which is earlier than Trump has indicated in recent weeks.
For its part, China will boost American agricultural purchases over the next several years. (More on that later.)
Headlines
About Those Farm Purchases As part of Phase One of the trade agreement, China has agreed to step up its purchases of U.S. agricultural goods. According to the U.S. Trade Representative, China will increase its U.S. farm purchases by $16 billion over 2017 levels each year for the next two years, with a goal of reaching $50 billion total.
The U.S. Farm Bureau, one of the main lobbying organizations for American farmers issued the following statement:
"...China went from the second-largest market for U.S. agricultural products to the fifth-largest since the trade war began. Reopening the door to trade with China and others is key to helping farmers and ranchers get back on their feet."
It's worth noting that if China did make good on those promises, its purchasing of U.S. farm products would nearly double its highest levels from the the 2012-13 era. It's possible, but that's a lot of soy. chart courtesy USDA  The Best Performing Stock of the Past 30 Years I warned you that we would be sharing a lot of statistics like these as the decade draws to a close. We don't do it so you will kick yourself for missing out, but rather to share surprising statistics that remind us how interesting investing came be sometimes. If you asked me to name the best performing stock in the S&P 500 over the past 30 years, I would've said Microsoft or Berkshire Hathaway without even thinking about it. And...I would've been wrong. The best performer is a company I have never heard of, but has bested the biggest companies on the planet. It's Jack Henry & Associates (JKHY), based in Monett, Missouri, and it provides software and financial technology to banks and other financial institutions. Over the past 30 years it has a total return of more than 38,000%, or an average annual return of over 20% per year, every year. Take that, Warren Buffett!  The Week Ahead:  Here's a brief look at the week ahead.
Wednesday December 18
Thursday December 19
chart courtesy YCHARTS  CenterPoint Energy rose 4.5% today after Royal Bank of Canada restated an "outperform" rating for the stock. Software maker Adobe rose 3.6% today after posting record sales.  Clothing maker Hanesbrands fell 5.1% today after a Bank of America analyst cut their rating of it from neutral to underperform on fears that sales of its Champion brand will slow down. Cosmetics firm Coty fell 5.1% after a Wells Fargo analyst cut their price target for the stock. Semiconductor company Broadcom fell 3.8% after it gave lackluster 2020 guidance. Word of the Day The balance of trade is the difference between the value of a country's imports and exports for a given period. The balance of trade is the largest component of a country's balance of payments. Economists use the BOT to measure the relative strength of a country's economy. The balance of trade is also referred to as the trade balance or the international trade balance.  Today in History December 13, 2007 Today in 2007 the Lisbon Treaty was signed. The Lisbon Treaty, which went into effect in December, 2009, reformed the European Union in a number of ways. It expanded the powers of the European Parliament, and officially adopted the Charter of Fundamental Rights, similar to the U.S. Bill of Rights. Most importantly it changed the way the Council of the European Union (the body made up of the heads of the constituent countries' governments) decided on policy, removing the need for unanimity to make decisions. The "Article 50" governing Brexit refers to article 50 of the Lisbon Treaty. Source: https://www.britannica.com/event/Lisbon-Treaty#ref1077232
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Friday, December 13, 2019
Curb Your Enthusiasm
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