ND&S Weekly Commentary 12.30.19 – Happy New Year!

December 30, 2019

Santa brought investors a positive holiday-shortened week. The Nasdaq reached all-time highs on Thursday and the Dow Jones Industrial Average (DJIA) and S&P 500 finished at their highest levels as well. For the week, the tech-heavy Nasdaq gained 0.91%, while the S&P 500 and DJIA returned 0.60% and 0.67%, respectively. So far this year, technology stocks in the S&P 500 have risen 48%. Investor enthusiasm spread internationally with developed equity markets (MSCI EAFE) gaining 0.77% and developing markets (MSCI EM) surging 1.16%. Interest rates declined as the yield on the 10yr U.S. Treasury came down from 1.92% the previous week to end at 1.87%.

Investors felt better about improving trade relations between the U.S. and China, positive economic data and booming retail sales from November 1st through Christmas Eve. According to the MasterCard Spending Pulse™, online spending grew 18.8% compared to 2018 with 14.6% of all retail sales taking place online.

Oil prices continue to see support from OPEC efforts to curb supply as well as hopes that the U.S./China trade deal will bolster global oil demand. West Texas Intermediate (WTI) and International Brent Crude markets were both up over 2% on the week. Gold prices also rallied 2.25%, which is a sign investors are hedging a little against equities.

On New Year’s Eve, consumer confidence will be reported and the Federal Reserve’s December meeting minutes will be released Friday along with an ISM Manufacturing report.

Without question it has been an eventful and prosperous year. We continue to recommend staying diversified and favoring dividend income and growth. Dividends have accounted for approximately 33% of the S&P 500 total return since 1960.

Wishing the very best for the New Year!