US and International Equities
As we finish out a challenging year this week, Congress passed COVID-19 relief, providing increased unemployment benefits, small business assistance, along with an additional $600 stimulus payment. In addition, Congress is presently in negotiations concerning additional stimulus payments.
The major market indexes closed higher this week. Compared to last week where the Nasdaq Composite Index was the best performer, the Dow Jones Industrial along with the S&P 500 indexes gained more ground compared to the technology-laden Nasdaq Composite.
International markets enjoyed a solid week. Emerging markets (MSCI EM Index) outperformed their developed international counterparts (MSCI EAFE Index).
Most sectors were in the green this week. Communication services, consumer discretionary, along with the utilities led the major averages. Information technology, industrials and energy lagged the benchmark S&P 500 index this week.
Small Caps Pull Back
Small caps broke their three consecutive week streak of gains, lagging the major market indexes this week. Following November’s strength, the Russell 2000 is still up over 8% so far for the month of December, outpacing all the major indexes for the month.
Fixed Income, Currencies, and Commodities
Bonds, as represented by the Bloomberg Barclays US Aggregate, finished fractionally higher for the week. In addition, the 10-year Treasury note traded slightly higher as yields decreased. Most bond sectors traded in lockstep with the 10-year Treasury and Bloomberg Barclays US Aggregate.
Commodities across the board had a mixed week. After ending its streak of six consecutive weekly gains last week, oil finished modestly higher this week. Natural gas rebounded as well. Silver and gold both reversed course from the previous week to end the week higher. Silver was the standout this week, returning almost 3%. Copper ended the week over 1% lower.
US and International Economic Data Recap
Jobless Claims Beat For Second Consecutive Week
Weekly jobless claims beat expectations as over 780,000 Americans filed for unemployment insurance according to the US Department of Labor. The consensus estimate was for over 800,000 filings. Moreover, continuing claims beat expectations, with just under 5.22 million remaining on unemployment vs. the estimate of over 5.3 million.
Housing Prices Higher
The S&P CoreLogic Case-Shiller 20-City Composite rose 7.95% year-over-year in October, marking the strongest year over year gain since 2014. A similar metric, surveyed by the Federal Housing Finance Agency, confirms the strong rise in home prices. For more of our thoughts on housing please read the LPL Research blog post Housing Data Continues to Surge.
Next week, to start the New Year, the following economic data is slated to be released:
- On Monday, we get December’s Markit Purchasing Manufacturing Index. In addition, we get data on November’s construction spending.
- On Tuesday, we get December’s ISM Manufacturing and Non-Manufacturing reading.
- Wednesday is all about December auto sales, ADP’s December employment survey, along with November durable and factory orders.
- Thursday provides investors another weekly initial unemployment claims report. Moreover, we also receive data on November’s trade balance.
- On Friday, we receive data on December’s hourly earnings along with last month’s manufacturing, nonfarm payrolls, and unemployment report. In addition, we will receive economic reports on November’s wholesale inventories and consumer credit.
Have a happy, healthy and safe 2021!
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References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results. All market and index data comes from FactSet and MarketWatch.
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