Let’s Give Thanks

December 2, 2019

Investors and traders should be thankful for the financial markets that keep on giving. Once again the US stock market reached all-time highs during the Thanksgiving Day holiday week. Improving economic data and progress towards a US and China Phase 1 trade deal created a positive and optimistic tone throughout the week.

The DJIA rose 0.75%, the S&P 500 added 1.04% and the Nasdaq finished up 1.72%. Developed international markets, as measured by the MSCI EAFE, also fared well increasing 0.52%. Emerging market equities were the only laggard down 0.80%. Despite recession worries and political turmoil in Washington, consumers, representing 70% of our GDP, are still spending. 3Q19 GDP was increased to 2.1% outpacing expectations for a 1.9% increase. The solid job market with historically low unemployment, a 3% increase in wages, and lower debt burdens have given consumers a lot to be thankful for and optimistic about their future. As a result, Black Friday hit a record $7.4 billion in US online sales with $2.9 billion in purchases made directly from smartphones.

For the week, consumer discretionary was the best sector climbing 1.78% with info tech coming in next up 1.73%. The energy sector continues to lag down 1.55% due to oversupply worries and US and China trade tensions. Fixed income assets moved sluggishly with the 10 year US Treasury remaining at around a 1.78% yield. The safe haven investment, gold, also was down 0.3% and declined 4% in November, its worst month in three years.

There will be economic reports on employment, consumer confidence, and Markit/ISM manufacturing and service PMIs. We would not be surprised if the markets paused for a while given the market’s healthy advance recently.

“Feeling gratitude and not expressing it is like wrapping a present and not giving it.” – William Arthur Ward