Mark M. Martiak
Managing Director Investments, AIF®

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© 2018 Mark Martiak, AIF®  |Managing Director Investments

December 11, 2017

Equities Climb to New Record Highs

December 11, 2017 – The S&P 500 Index extended gains for a third week, after a stronger-than-expected November jobs report on Friday provided relief to a host of uncertainties and struggles the markets experienced earlier in the week. Labor Department officials said the economy created 228,000 new jobs last month, topping economists’ consensus forecast for 195,000. The headline unemployment rate held steady at a 17-year low of 4.1%, while wage growth remained tepid, rising just 0.2% in November and up 2.5% year-over-year. Overall jobs data helped steepen the Treasury yield curve, led by a pick-up in long-end yields, and thus provided a positive sign for economic growth. Investor sentiment also brightened after U.K. and European Union officials struck a deal to unlock further Brexit talks and the U.S. Congress approved a two-week stop-gap spending measure to avert a government shutdown.

In other key economic data released last week, U.S. factory orders declined by 0.1% in October, which was better than expectations for a 0.4% pullback. Meanwhile, September factory orders were upwardly revised to 1.7% from 1.4% previously reported. The U.S. trade deficit widened 8.6% to a nine-month high in October as imports rose 1.6% to a record $244.6B, while exports were unchanged at $195.9B. The ISM’s non-manufacturing (service sectors) activity index fell to 57.4 from a twelve-year high of 60.1 in October. Worker productivity climbed by 3% during the third quarter, shy of forecasts for a 3.3% increase. Lastly, new claims for unemployment benefits unexpectedly declined last week, falling by 2,000 to 236,000, capping a third week of declines and the 144th consecutive week below 300,000 – a level consistent with a strong jobs market.

For the week, the S&P 500 gained 0.39%, the Dow Industrials rose 0.40% and, despite gains in technology companies, the NASDAQ Composite slipped 0.10%. The S&P 500 and Dow Industrials ended at new record highs. Small cap companies underperformed, with the Russell 2000 Index ending the week with a 0.97% loss. Seven of the 11 major sector groups posted gains last week, led by Financials (+1.52%), Industrials (+1.38%) and Consumer Staples (+0.68%). Technology (+0.08%) rose the least, while Utilities (-0.96%) and Real Estate (-0.95%) lagged the most among decliners. West Texas crude oil futures fell $1 per barrel last week, ending at $57.36, while a stronger U.S. dollar, up all five days last week, pressured gold and other metals lower. Gold fell 2.5% last week, ending at $1,248.50 and the U.S. Dollar Index climbed 1.09% to end at 93.901. Treasury prices eased, sending the yield on 10-year Treasury bonds up just 1.5 basis points to 2.377%.

 

What We’re Reading

New Optimism for Brexit Talks

December Rate Hike Widely Expected

Will Tax Cuts Pay for Themselves?

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 Week’s Economic Calendar

Monday, December 11: Job Openings (JOLTS);

Tuesday, December 12: Small Business Optimism, Producer Prices, FOMC Meeting begins;

Wednesday, Deecmber 13: Mortgage Activity, Consumer Prices, FOMC Policy Decisions (2 pm ET), Fed Chair Janet Yellen’s Press Conference (2:30 pm ET);

Thursday, Dececmber 14: Jobless Claims, Retail Sales, Import/Export Prices, Business Inventories;

Friday, December 15: Empire State Manufacturing Survey, Industrial Production.

Includes a broad overview of the week's economic and world updates with direct market insight with a market table, weekly economic calendar, points of view and words of wisdom.

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Comments

Justin 
January 5, 2016

 

Mark, 

 

Happy New Year. Your weekly Vantage Point is excellent. Thanks for including me. 

 

Best, 

Justin

Securities offered through First Allied Securities, Inc., a registered broker/dealer, Member: FINRA/SIPC. Advisory services offered through First Allied Advisory Services, Inc. and Premier Wealth Advisors, LLC, both registered investment advisers. Premier Wealth Advisors, LLC is not affiliated with First Allied Securities, Inc. or First Allied Advisory Services, Inc.

 

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