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In the Markets – Week-Ending December 9th

by Peter J. Creedon

Newsletter: In the Markets – Week-Ending December 9th 
Crystal Brook Advisors
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United States: Private companies added a net 216,000 positions during the month, smashing the 165,000 estimate from economists surveyed by Reuters and marking the best month since June. The number was nearly double the 119,000 in October, which was revised lower from the originally reported 147,000. (1)  The Index of Consumer Sentiment hit 98 in December, the University of Michigan reported on Friday. The figure is up from 93.8 in November’s final reading. (1)  Net worth for households and non-profit groups rose by $1.59 trillion, or 1.8 percent, to a record $90.2 trillion in July through September from the previous three months, according to Fed’s financial accounts report, previously known as flow of funds survey. (2)

Europe: Europe’s economy is not strong enough to be taken off life support. That’s the view of the European Central Bank, which announced Thursday that it will extend its bond buying program until at least December 2017. But the pace of purchases — currently at €80 billion ($86 billion) a month — will slow to €60 billion ($64 billion) a month starting in April. (3) Bill Adams, an economist at PNC, agreed that the bank would reduce its purchases “super slowly.” He said the central bank had made clear that it was committed to stimulus for as long as the economy needs support. The euro jumped slightly against the dollar after the announcement, but dropped 1.3% as investors digested the decision. (3)

Asia: Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 1.23% and the Shanghai Composite rose 0.54%. The Hang Seng lost 0.44%. (3)  Japan’s lower house passed a bill to legalize casinos on Tuesday which could benefit global casino operators such as Genting Singapore, which was up as high as 3.06 percent at 1.01 Singapore dollar per share. (3) Myanmar’s central bank is braced for a deeper slide in the nation’s currency and has little scope to tackle the decline after the kyat fell the most in Southeast Asia, according to one of the monetary authority’s top officials. The kyat has weakened about 10 percent against the dollar in the past six months, data compiled by Bloomberg show. The drop could deepen if the U.S. Federal Reserve increases interest rates this month as expected, said U Win Thaw, the director general of the foreign-exchange management department in the Central Bank of Myanmar. (2)

Latin America: Latin America is set to become a leader in alternative energy. (4)  The region’s impressive clean-energy production is boosted by an abundance of hydropower. Big dams are increasingly controversial: in recent years, Brazil and Chile have blocked hydro-electric projects in environmentally sensitive areas. Alternative energy sources, such as wind, solar and geothermal, still only account for around 2% of Latin America’s output, compared with a world average of 6%. Nonetheless, there are several reasons to think this share will grow quickly. (4)

Monday 12/5
  • West Texas Intermediate crude closed up 0.2%, off of the highs Monday, to $51.79 a barrel, following last week’s decision by OPEC to cut production output by 1.2 million barrels a day, the cartel’s first cut in production in eight years. Brent crude, the global benchmark, traded at $54.42, down 07%. (5)
  • The Institute for Supply Management’s Non-Manufacturing Index climbed to 57.2 in November outpacing the reading of 54.8 in October. The index showed solid gains, the fastest growth in a year, with strong new orders and business activity. (5)
Tuesday 12/6
  • The S&P 500 and the Dow were little changed on Tuesday, weighed down by energy stocks, while gains in technology companies boosted the Nasdaq. (6)
  • Chinese data released Tuesday showed that consumer and wholesale price-growth accelerated at a faster than expected pace last month. Because China is the world’s second-largest economy, the rise portends a pickup in global inflation expectations. (8)
Wednesday 12/7
  • Natural gas prices closed lower on Wednesday, reversing gains after nearing a two-year high. (7)
  • US. stocks charged to fresh highs Wednesday, with major indexes logging their biggest one-day rally since the election. (7)
Thursday 12/8
  • Stocks had been under pressure in early trading as a decline in health-care and biotechnology stocks weighed on broader indexes. But a broad afternoon rally lifted the Dow Jones Industrial Average nearly 300 points and elevated both the blue-chip index and S&P 500 to closing records. (7)
Friday 12/9
  • Gold futures fell Friday, putting the metal on track for their fifth weekly loss in a row and the lowest finish since February as the dollar firmed ahead of next week’s Federal Reserve meeting. (8)

Market Close

Stocks finished at records Friday as consumer sentiment surged and markets continued their Trump-inspired rally. The Dow Jones Industrial Index DJIA, +0.72% finished up 142.04 points, or 0.7%, at 19,756.85, for a weekly gain of 3.1%, the blue-chip average’s fifth week of consecutive gains. (8)

Contributor: Thomas Padula

Sources:  (1), CNBC (2), Bloomberg (3),CNN Money(4), The Economist (5), The Street (6), Reuters (7), Wall Street Journal (8) Market Watch