Weekly Update

The Weekly Update

Week of December 18, 2017
By Christopher T. Much, CFP®, AIF®

Domestic markets were up last week as tax reform became more likely. On Friday, several previously undecided Senators announced they would back the combined House and Senate bill, and stocks reacted by hitting new record highs. For the week, the S&P 500 gained 0.92%, the Dow added 1.33%, and the NASDAQ grew by 1.41%. International stocks in the MSCI EAFE increased 0.13%.

The House and Senate may vote on the tax plan this week, and if it passes, many changes will be on the horizon, including the corporate tax rate dropping from 35% to 21% in 2018. Anticipation of this change has contributed to the many record highs we’ve seen in the domestic markets this year.

However, while tax reform was a major topic last week, we also received a number of other economic updates. Two key events are …

The Weekly Update

Week of December 11, 2017
By Christopher T. Much, CFP®, AIF®

As the holiday season progresses, the markets continue to impress. Last week, many energy, financial, and industrial sector stocks helped drive performance. Hitting record highs yet again, the S&P gained 0.35%, and the Dow jumped 0.40% for the week. Meanwhile, the NASDAQ fell slightly by 0.11%, and the MSCI EAFE rose 0.08%.

Solid labor market conditions and a rebounding retail climate are helping to support the economy as the year closes. Here are some developments that stood out last week:

Promising Labor Market Numbers

Encouraging news came on Friday when we learned that nonfarm payroll jobs rose more than expected in November, coming in at 228,000. Manufacturers have created almost 200,000 new jobs in the last 12 months and 1 million new factory jobs since 2010. We have now had 86-straight months of job gains, the longest stretch in U.S. …

The Weekly Update

Week of December 4, 2017
By Christopher Much, CFP®, AIF®

Markets went for a wild ride last week—especially on Friday. In fact, on December 1, the S&P 500 had its largest fluctuations since the day after the 2016 presidential election.

Nonetheless, two of the major domestic markets hit new record highs on Thursday and ended the week with sizable gains. The S&P 500 added 1.53% and the Dow gained 2.86%. Meanwhile, the NASDAQ lost 0.60% and international stocks in the MSCI EAFE gave back 0.95%.

What drove markets last week?

Politics played a large role in market performance last week with big developments on tax reform and the Russia investigation.

• Tax Reform
  On Thursday, news that the Senate bill was more likely to pass contributed to the Dow and S&P 500 closing at record highs. Early Saturday morning, the Senate did end up voting in favor of the proposal.
• Russia Investigation
  On …

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The Weekly Update

Week of November 27, 2017
By Christopher Much, CFP®, AIF®

Last week was a relatively quiet time in the domestic markets. We did not receive a tremendous amount of economic data, and trading halted Thursday for the Thanksgiving holiday. Nonetheless, all 3 of the major domestic indexes experienced sizable gains in only 4 trading days. By Friday, the S&P 500 added 0.91% and closed above 2,600 for the first time in its history. The Dow was also up 0.86%, and the NASDAQ gained 1.57%. International stocks in the MSCI EAFE had a 5-day trading week and grew by 1.85%.

A variety of factors contributed to this performance—from growth in the tech sector to increasing crude oil prices. But a specific event also helped push stocks higher: Black Friday.

The Black Friday Effect

What happened on Black Friday this year?
In the U.S., Black Friday is big business. The day after Thanksgiving …

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The Weekly Update

Week of November 20, 2017
By Christopher Much, CFP®, AIF®

Domestic stock performance varied last week, with the S&P 500 and Dow losing ground for the 2nd straight week, while the NASDAQ posted gains. By Friday, the S&P 500 had dropped 0.13%, the Dow gave back 0.27%, and the NASDAQ gained 0.47%. International stocks in the MSCI EAFE stumbled, dropping 0.67%.

Tax reform remained a key focus in the markets, as investors questioned whether changes will happen by the end of 2017. The markets have largely priced in expectations that tax reform will move forward, a belief that has helped drive this year’s record prices. Treasury Secretary Mnuchin expects the President to receive a bill by Christmas, but despite his update, concerns about meeting this deadline remain. This uncertainty—combined with questions about differences between the House and Senate plans—has contributed to the market volatility we’ve seen in recent weeks.

While …

The Weekly Update

Week of November 13, 2017
By Christopher Much, CFP®, AIF®

After posting gains every week since September, U.S. stocks declined by market’s close on Friday. The S&P 500 and Dow ended their longest stretch of weekly increases since 2013, and the NASDAQ ended its own 6-week streak. By November 10, the S&P 500 declined 0.21%, the Dow was down 0.50%, and the NASDAQ slipped 0.20%. Meanwhile, the MSCI EAFE dropped by 0.45%.

While these declines are not huge, understanding why stocks dropped after several weeks of steady gains is important. The markets are incredibly complex, so we cannot point to one single detail that drove their performance. We can, however, help you gain insight into what influenced investors’ decisions.

The Market’s Drop in Context
In many ways, uncertainty is to blame for last week’s losses, from a variety of angles:

• Healthcare: Equities dropped as companies continue to analyze changing dynamics …
  

The Weekly Update

Week of November 6, 2017
By Christopher T. Much, CFP®, AIF®

Once again, the markets ended the week in positive territory—and all 3 major domestic indexes hit new record highs. The S&P 500 added 0.26%, and the Dow was up 0.45%, with both indexes notching their 8th straight week of growth. The NASDAQ was up for the 6th week in a row with a 0.94% gain. International stocks in the MSCI EAFE joined in the growth, posting a 0.90% increase.

Why did markets continue to perform well last week? In part, economic data, political developments, and policy decisions gave investors a variety of details to digest.

Perspectives We Gained Last Week

1. Tax Reform
The House of Representatives released a long-awaited tax-reform bill on November 2, which included several changes to current laws. If passed, this legislation would reduce the corporate tax rate to 20% while cutting in half the mortgage-interest …

The Weekly Update

Week of October 30, 2017
By Christopher T. Much, CFP®, AIF®

Another week, another round of positive market performance. The 3 major domestic indexes again ended the week with gains and new record highs. The S&P 500 rose 0.23% and marked a 7th-straight week of increases—its longest string of weekly gains in almost 3 years. The Dow added 0.45%, and the NASDAQ grew by 1.09%. Meanwhile, international stocks in the MSCI EAFE slipped slightly, losing 0.35% for the week.

On October 25, we learned that September home sales were higher than anticipated and durable goods orders grew by 2.2% in the same month. This data provided more evidence that the economy is on solid ground. However, two other occurrences last week contributed even more to the continuing market gains: 1) Q3 GDP numbers and 2) tech companies’ corporate earnings reports.

What Drove Markets Last Week?

1. Economic growth beat expectations.
   We …