Market Update: Wednesday, December 21, 2016


  • U.S. markets dip, follow Europe lower. Stocks are slightly lower in early trading, taking the lead from European shares, which are being dragged down by bank stocks in afternoon trading as investors focus on Italian banks’ woes. Major U.S. indexes finished in the green yesterday as the Dow notched its 17th record-high close since the U.S. election; now within 26 points of the 20,000 level. The S&P 500 gained 0.4%, led upward by the financials sector (+1.1%). Overnight in Asia, major indexes were mixed with the Nikkei losing 0.3%, whereas the China’s Shanghai Composite advanced 1.1% despite liquidity concerns heading into the final trading days of the year; the STOXX Europe 600 is down 0.3%. Both WTI crude oil ($53.65/barrel) and COMEX gold ($1,136/oz.) are up modestly as the dollar pulls back from a 14-year high, and the yield on the 10-year Treasury is unchanged at 2.56%.


  • Dow 20,000. The Dow came within 13 points of hitting 20,000 yesterday and eventually closed 26 points below. The media continues to focus on this, and although it is nothing more than a random number, big milestones are a chance to reflect how far we’ve come and how strong this nearly eight-year-old bull market has been. If the Dow can close above 20,000 today, it would have taken only 20 days to go from 19,000 to 20,000–breaking the old record of 24 days from 10,000 to 11,000. We are aware as the Dow goes higher the percentage between one-thousand-point intervals is smaller; this is still a very interesting development.
  • Checking in on the Trump Rally. The current rally has been dubbed the Trump Rally and for the sake of argument, we’ll call it that. After 29 trading days since the U.S. election, the Dow has been higher 23 days and gained 9.0%. Going back to 1900, only the 29 days after Calvin Coolidge was elected in 1924 saw a better return, up 9.2%. The last time the Dow was green more times out of 29 days than the current streak was 24 out of 29 days in April and May 2007.



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Past performance is no guarantee of future results.

The economic forecasts set forth in the presentation may not develop as predicted.

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