Quiet December a contrast to 2018. With four trading days left until the New Year, markets continue to look to drift higher, with stocks set to open modestly higher this morning. The MSCI Asia Pacific Index rose 0.2% overnight while European markets remain closed for the holiday. The S&P 500 Index has moved higher eight of the last ten days and has not seen a move of more than 1% since October 11, 2019. Contrast that with 2018’s tumultuous December, which saw 10 moves of more than 1%, including declines of more than 2% on December 23 and 24. The market started a mighty rally from there as the tone shifted at the Federal Reserve, with the index up almost 40% over the ensuing year through Tuesday’s close.
Solid holiday shopping season for online retailers. Data from Mastercard Spending Pulse showed U.S. retail sales (excluding autos) rose 3.4% year over year from November 1 through December 24, lower than 2018’s 5.1% increase and slightly below the 4% forecast from the National Retail Federation. Online sales, which now make up nearly 15% of total sales, led the charge with a 18.8% year-over-year increase, compared with 1.2% for in-store sales. We would not consider these results disappointing given the late Thanksgiving holiday that left retailers with six fewer sales days before Christmas, and therefore, we expect some post-holiday catch-up. The near-term consumer spending outlook remains solid given low unemployment, solid wage gains, and stock market appreciation.
Lots of winners in 2019. It wasn’t too hard to stumble into a winner if you owned stocks in 2019. With just four trading days left in the year, the S&P 500 has returned 31%, its best yearly return since 2013. Whether you owned diversified stock portfolios of growth or value stocks, small or large cap stocks, domestic or international stocks, the chances are very good that you ended up with returns from your stock portfolios in excess of 25% in 2019. Today on the LPL Research Blog, we highlight some of 2019’s winners and losers. Look for more 2019-in-review commentary on tomorrow’s blog and in our December 30 Weekly Market Commentary.
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Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.
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