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Weekly Commentary (11/20/17) – Thanksgving …

A strange thing happened last week – the markets finished mostly lower. Yes, it does happen.

For the week, the DJIA dropped 0.19 while the S&P 500 finished lower by just 0.06% after being down last week as well (marking the first time since May that the S&P 500 finished lower two weeks in a row). Developed international markets also dropped as the MSCI EAFE index closed down 0.59% for the week. Emerging markets bucked the trend last week as the MSCI EM index finished higher by 0.72%. Fixed income, represented by the Bloomberg/Barclays Aggregate, finished the week up 0.24%. As a result, the 10 YR US Treasury closed at a yield of 2.35% (down 5 bp from the previous week’s closing yield of 2.40%). Gold advanced $23.40 to close at $1,295.80/oz. Oil prices were essentially flat (down 19 cents) as they closed the week at $56.55/bbl. Recent events in Saudi Arabia have had little impact on prices as the real driver of higher prices lately points to a normalization of global inventories (ongoing production cuts) and reasonably steady demand.

Economic news released last week reinforced investors’ beliefs that the economy is solid. The Bureau of Labor Statistics (BLS) announced that October’s PPI advanced 0.4%, ahead of expectations of a 0.1% increase. Additionally, the BLS reported that the October CPI rose 0.1%, in-line with expectations. On Thursday, the Fed reported that industrial production rose a healthy 0.9% in October, nicely ahead of expectations for a 0.5% jump. Weekly jobless claims for the week ending November 11 failed to meet expectations, but jobless claims continued to be impacted by the slow recovery in Puerto Rico. Lastly, Friday saw that the Census Bureau report that October housing starts surged 13.7% (after three consecutive months of declines).

The holiday-shortened week ahead will see more economic releases – Leading Indicators, Existing Home Sales, Chicago Fed Activity Index, Weekly Jobless Claims, Univeristy of Michigan Sentiment, Durable Goods Orders, the Markit US Manufacturing PMI and the release of the FOMC November meeting minutes.

As always, we plan to look through the day-to-day news and focus on longer-term objectives. Investors should stay the course and stick close to their long-term asset allocation targets. But most importantly, let’s give thanks for the many blessings in our lives.

Best wishes for a Happy Thanksgiving!

“Be thankful for what you have; you’ll end up having more. If you concentrate on what you don’t have, you will never, ever have enough.”Oprah Winfrey

 

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