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Weekly Market Insights

The Markets (as of market close ​​​​​​January 1​7, 2020)

Each of the benchmark indexes listed here enjoyed strong gains last week, led by the Russell 2000, which climbed 2.53% to push its year-to-date gains to nearly 2.0%. The Dow has posted weekly gains for five of the last six weeks, the S&P 500 advanced for the second consecutive week, and the Nasdaq has risen for six straight weeks. A strong housing starts report helped push stocks higher. But investors were most encouraged by advances on the trade front with Congress passing a revised trade deal between the United States, Canada, and Mexico, which was followed by last Thursday's signing of the first phase of a trade agreement between the United States and China.

Oil prices dropped again last week, closing at $58.73 per barrel by late Friday afternoon, down from the prior week's price of$59.14. The price of gold (COMEX) fell for the first time in several weeks, closing at $1,556.80 by late Friday afternoon, off from the prior week's price of $1,561.60. The national average retail regular gasoline price was $2.570 per gallon on January 13, 2020,$0.008 lower than the prior week's price but $0.323 more than a year ago.Each of the benchmark indexes listed here enjoyed strong gains last week, led by the Russell 2000, which climbed 2.53% to push its year-to-date gains to nearly 2.0%. The Dow has posted weekly gains for five of the last six weeks, the S&P 500 advanced for the second consecutive week, and the Nasdaq has risen for six straight weeks. A strong housing starts report helped push stocks higher. But investors were most encouraged by advances on the trade front with Congress passing a revised trade deal between the United States, Canada, and Mexico, which was followed by last Thursday's signing of the first phase of a trade agreement between the United States and China.

Market/Index

2019 Close

Prior Week

As of ​1/107

Weekly Change

YTD Change

DJIA

28538.44

28823.77

29348.10

1.82%

​​​2.84%

Nasdaq

8972.60

9178.86

9388.94

2.29%

4.64%

S&P 500

3230.78

3265.35

3329.62

1.97%

​3.06%

Russell 2000

 1668.47

1​​657.64

1​​699.64

2.53%

​​1.87%

Global Dow

3251.24

3260.65

3299.82

1.20%

1.49%

Fed. Funds target rate

1.50%​–1.75%

1.50%​–1.75%

1.​50%​–1.75%

​0 bps

0 bps

10-year Treasuries

1.91%

1.82%

1.83%

1 bps

-​​​​8 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic Headlines

  • The federal government incurred a $13 billion deficit in December, effectively the same shortfall as in December 2018. Year-to-date, the federal deficit sits at $357 billion, 12% higher than the deficit over the same period a year earlier. Total government receipts through December were $806 billion ($771 billion last fiscal year) and total government expenditures were $1.163 billion ($1.090 billion last year). There are some important budgetary line items to note through the first three months of the government's fiscal year (FY 2020 started in October 2019). Individual income taxes ($385 billion) accounted for 47.7% of total government receipts, followed by social insurance ($290 billion) at 35.9%. Those two line items combined represent 83.6% of the government's total receipts. The government spent $266 billion on Social Security, which accounted for almost 22.8% of total government expenditures. This expense was followed closely by the $196 billion spent on national defense (16.8%) and the $166 billion outlay for Medicare (14.2%). Lastly, customs duties provided $21 billion in receipts, or 2.6% of total receipts. However, customs duties are up 18.6% over last year, likely a reflection of the increased tariffs on Chinese imports.
  • Consumer prices rose 0.2% in December following a 0.3% jump in November. Over the last 12 months, consumer prices have increased 2.3%, the largest 12-month increase since the period ended October 2018. Driving the monthly price increase was a 2.8% hike in gasoline prices (up 7.9% since December 2018).Consumer prices less food and energy crept up 0.1% last month and are up 2.3% over the last 12 months.
  • Producer prices edged up 0.1% in December, the first increase since jumping ahead 0.4% in October. Overall, producer prices rose 1.3% in 2019 after climbing 2.6% in 2018. Prices less foods, energy, and trade services inched up 0.1% in December following no change in November. In 2019, the index for final demand less foods, energy, and trade services climbed 1.5% after advancing 2.8% in 2018. For December, much of the increase in producer prices was driven by a 1.5% increase in energy prices (gas prices advanced 3.7% in December), while prices for goods fell 0.2%.
  • Consumers ramped up their purchases at the retail level in December as sales increased by 0.3% from November's total. Retail sales are up 5.8% over December 2018, and total sales for 2019 are 3.6% ahead of sales for the previous year. Retail trade sales (resales of consumer items) were up 0.4% from November 2019 and 6.0% above last year. Nonstore (online) retail sales were up 19.2% from December 2018, and gasoline station sales were up 11.3% from last year.
  • Import prices rose 0.3% in December after ticking up 0.1% in November. The December increase in import prices (the biggest monthly gain since March) was largely driven by increasing fuel prices. Prices for imports rose 0.5% in 2019 after decreasing 0.9% in 2018. The 12-month advance in December was the largest over-the-year increase since the index rose 0.7% between November 2017 and November 2018. Prices for import fuel increased 19.3% in 2019 following a 13.1% drop the previous year. Export prices fell 0.2% last month following a 0.2% advance in November. Prices for exports declined 0.7% in 2019 following a 1.1% increase in 2018. The 2019 drop was the first calendar-year fall since the index declined 6.6% in 2015.
  • December's building permits were 3.9% below November's totals, but are 5.8% over December 2018. The last month of the year saw plenty of new construction as housing starts rose 16.9% above November's estimate and finished 2019 40.8% over the December 2018 rate. Single-family housing starts in December were 11.2% above the November totals. The inventory for new homes for sale to start 2020 should increase as housing completions in December were 5.1% over November's estimate, and 19.6% above the December 2018 rate.
  • Industrial production declined 0.3% in December, as a decrease of 5.6% for utilities outweighed increases of 0.2% for manufacturing and 1.3% for mining. The drop for utilities resulted from a large decrease in demand for heating, as unseasonably warm weather in December followed unseasonably cold weather in November. Total industrial production was 1.0% lower in December than it was a year earlier.
  • According to the latest Job Openings and Labor Turnover report, the number of job openings fell to 6.8 million (-561,000) on the last business day of November. The job openings rate decreased to 4.3%. The largest decreases in job openings were in retail trade (-139,000) and construction (-112,000). Over the month, hires and separations were little changed at 5.8 million and 5.6 million, respectively. Over the 12 months ended in November, hires totaled 69.8 million and separations totaled 67.5 million, yielding a net employment gain of 2.3 million.
  • For the week ended January 11, there were 204,000 claims for unemployment insurance, a decrease of 10,000 from the previous week's level. According to the Department of Labor, the advance rate for insured unemployment claims remained at 1.2% for the week ended January 4. The advance number of those receiving unemployment insurance benefits during the week ended January 4 was 1,767,000, a decrease of 37,000 from the prior week's level, which was revised up by 1,000.

Eye on the Week Ahead

The holiday-shortened week comes with a dearth of major economic reports. December's existing home sales information is available this week. November's sales were down 1.7% from the prior month. Another drop in sales in December could pull 2019 total sales back to their 2018 levels.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
Market summaries contain information on the Dow, S&P 500, NASDAQ, Russell 2000, Global Dow, Federal Funds interest rate, and 10-year Treasury yields, as well as highlights of past and future economic data.


The Markets (as of market close ​​​​​​January 10, 2020)

Last Friday's jobs report was a mixed bag of information. While 145,000 new jobs were added and the unemployment rate remained at 3.5%, wage growth was tepid in December to cap off a year of only moderate wage growth. This information, coupled with news that the Senate would receive the articles of impeachment this week, culled what was otherwise a strong week for stocks. The Dow passed 29000 earlier last week only to pull back by week's end. In any case, most of the indexes listed here posted gains last week, except for the small caps of the Russell 2000, which has gotten off to a relatively slow start in 2020. Conversely, the tech-heavy Nasdaq continues to post strong returns, climbing 1.75% last week and 2.30% ahead of its 2019 closing value.

Oil prices plummeted last week, closing at $59.14 per barrel by late Friday afternoon, down from the prior week's price of $63.05. The price of gold (COMEX) rose higher again last week, closing at $1,561.60 by late Friday afternoon, up from the prior week's price of $1,553.30. The national average retail regular gasoline price was $2.578 per gallon on January 6, 2020, $0.007 more than the prior week's price and $0.341 more than a year ago.

Market/Index

2019 Close

Prior Week

As of ​1/10

Weekly Change

YTD Change

DJIA

28538.44

28634.88

28823.77

0.66%

​​​1.00%

Nasdaq

8972.60

9020.77

9178.86

1.75%

​​2.30%

S&P 500

3230.78

3234.85

3265.35

0.94%

1.07%

Russell 2000

 ​1668.47

1660.87

1657.64

​-0.19%

​​-0.65%

Global Dow

3251.24

3258.76

3260.65

0.06%

0.29%

Fed. Funds target rate

1.50%​–1.75%

1.50%​–1.75%

1.​50%​–1.75%

​0 bps

0 bps

10-year Treasuries

1.91%

1.78%

1.82%

 4bps

-​​​​9 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic Headlines

  • There were 5.8 million unemployed persons in December, and the unemployment rate remained at 3.5%. A year earlier, the unemployment rate was 3.9% based on 6.3 million unemployed persons. The labor force participation rate was unchanged at 63.2% in December. The employment-population ratio was 61.0% for the fourth consecutive month but was up by 0.4 percentage point over the year. There were 145,000 new jobs added in December. Notable job gains occurred in retail trade and health care, while mining lost jobs. In 2019, employment rose by 2.1 million, down from a gain of 2.7 million in 2018. The average workweek was unchanged at 34.3 hours in December. Average hourly earnings rose by $0.03 to $28.32 last month. Over the last 12 months, average hourly earnings have increased by 2.9%.
  • In the latest report from the Census Bureau, the goods and services trade deficit for November was $43.1 billion, down $3.9 billion from October's deficit of $46.9 billion, revised. November exports were $208.6 billion, $1.4 billion more than October exports. November imports were $251.7 billion, $2.5 billion less than October imports. Year-to-date, the goods and services deficit decreased $3.9 billion, or 0.7%, from the same period in 2018. Exports decreased less than $0.1 billion, or less than 0.1%. Imports decreased $3.9 billion, or 0.1%.
  • According to the latest Non-Manufacturing ISM® Report On Business®, the December non-manufacturing index was 55%, 1.1 percentage points higher than the November reading. In the services sector, survey respondents saw an uptick in prices and business activity. However, new orders and employment dropped in December from the prior month.
  • For the week ended January 4, there were 214,000 claims for unemployment insurance, a decrease of 9,000 from the previous week's level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims remained at 1.2% for the week ended December 28. The advance number of those receiving unemployment insurance benefits during the week ended December 28 was 1,803,000, an increase of 75,000 from the prior week's level.

Eye on the Week Ahead

This is a busy week for market-influencing economic reports, starting with the Treasury budget report for December. The government deficit has been expanding, reaching close to $1 trillion. The latest information on inflationary trends is also out with reports on consumer and producer prices. The Federal Reserve's report on industrial production is also out at the end of the week. If surveys of purchasing managers are any indication, the Fed's report on industrial production will show continued weakness in December.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. 

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
Market summaries contain information on the Dow, S&P 500, NASDAQ, Russell 2000, Global Dow, Federal Funds interest rate, and 10-year Treasury yields, as well as highlights of past and future economic data.

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