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In the Markets – Week-Ending December 23rd

by Peter J. Creedon

Newsletter: In the Markets – Week-Ending December 16th 
Crystal Brook Advisors
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United States: Consumer sentiment rose for the second month in a row in December. While consumers’ assessment of current conditions fell slightly, their expectations of future economic conditions improved, climbing 0.6 points. (1)  While hard economic data continues to point toward firming inflation, consumers’ expectations of inflation one year and 5- 10 years ahead fell slightly to 2.2 and 2.3 percent, respectively. (1)  Personal income came in flat in November after a downwardly-revised 0.5 percent reading in October. Income growth for the month was held back by a 0.1 percent decline in wages and salaries. The saving rate has begun to come down and stood at 5.5 percent from 6.0 percent this time last year. Real disposable income fell 0.1 percent for the month following a 0.2 percent rise in October. (1)

Europe: The pan-European index finished fractionally lower for the week, during which the market saw lower trading volume as investors prepared for the Christmas holiday. (2)  The French economy grew 0.2% quarter-on-quarter in the third quarter, statistics agency Insee said Friday, confirming an earlier reading. (2)  The U.K. economy grew faster than previously thought in the three months following June’s vote to leave the European Union. The growth rate was moved up to 0.6% compared with a previous estimate of 0.5%. (2)

Asia: Asian markets finished mixed on Friday as gaming shares tumbled in Hong Kong and South Korea’s main index ended down before parliament voted to impeach President Park Geun-hye over an influence-peddling scandal. (3)  Before the vote, the benchmark Kospi closed down 6.38 points, or 0.31 percent, at 2,024.69 at 2:30 p.m. HK/SIN. The Korean won strengthened from an earlier session low of 1,168.31 against the dollar before the news to around 1,164.26 after. (3)  Martin noted an impeachment vote could take up to 180 days of review by the Constitutional Court before new elections were called, which suggested continued uncertainty for South Korean politics in the near future. (3)

Latin America: Inflation in Mexico accelerated in the first half of December, moving further from the central bank’s 3% target as a weaker peso put pressure on goods prices and tourism services rose ahead of the Christmas holiday season. (4)  The consumer price index rose 0.42% in the first two weeks of the month, pushing the annual rate up to 3.48% from 3.31% at the end of November, the National Statistics Institute said Thursday. The core index, which excludes energy and fresh fruit and vegetables, rose 0.47% to an annual 3.46%. (4)

Monday 12/19
  • Stocks edged higher worldwide on Monday as Wall Street extended a rally that has pushed U.S. stocks near all-time highs, while the dollar got a boost from Federal Reserve Chair Janet Yellen who sounded optimistic about the U.S. labor market. (5)
Tuesday 12/20
  • The Dow Jones Industrial Average DJIA, +0.46% rose 90.54 points, or 0.46%, to close at a new record of 19,973.73. Earlier, the Dow hit a new intraday record of 19,987.63, a mere 0.1% away from 20,000. The blue-chip index has seen larger gains than the S&P 500 and Nasdaq since the unexpected election of Donald Trump last month, thanks to outsized gains in such components as Goldman Sachs and Exxon Mobil Corp. XOM, +0.01% (6)
Wednesday 12/21
  • Oil prices fell after the U.S. Energy Information Administration reported an unexpected crude inventory build and Libya’s National Oil Corporation said it planned to boost oil production by 270,000 barrels per day. (6)
  • The euro, which touched a 14-year low on Tuesday, rose 0.4 percent to $1.0424 while the yen gained 0.25 percent to 117.55 per dollar. (6)
Thursday 12/22
  • The Dow Jones Industrial Average DJIA, -0.03%  finished 23.08 points, or 0.1%, lower at 19,918.88. The blue-chip index struggled to hit 20,000 as the psychologically important level has eluded it for days amid stalled momentum. (5)
  • The tech-heavy Nasdaq Composite COMP, +0.07%  declined 24.01 points, or 0.4%, at 5,447.42, but is still hovering near its record level set on Tuesday. (5)

Friday 12/23

  • Following the market opening Friday, the Dow traded up 0.02 percent to 19,922.07 while the NASDAQ rose 0.07 percent to 5,451.00. The S&P also rose, gaining 0.05 percent to 2,262.04. (7)
  • Consumer sentiment for December came in at 98.2, above the expected read of 98.0. New home sales rose 5.2 percent last month, more than expected. (3)

Market Close

U.S. equities closed mostly flat on Friday ahead of the Christmas holiday, as the Dow Jones industrial average failed again to reach the psychologically important level of 20,000. (3)

Contributor: Thomas Padula

Sources:  (1),Wells Fargo Economics (2),MorningStar  (3),CNBC (4), Wall Street Journal (5),Market Watch (6), Reuters (7), NASDAQ