Weekly Market Wrap: World banks came together this week and
pledged to provide the liquidity needed to help Europe repair itself giving the
markets fuel for the best week in two years.
The S&P 500 index surged over 7% to close at 1,244.28. Gold and Oil moved higher as well. Gold was up nearly 4% to $1,745 and Oil
gained 4.69% to close at $101.03. The
Dollar was lower against other world currencies down 1.24% to $78.61.
Year-To-Date for the major indexes: The S&P index
-1.06%, The Dow Jones Index +3.82, The NASDAQ -0.98%, The Russell 2000 Small cap
Index -6.21, EAFE International -13.10%.
The 10 year treasury is currently yielding 2.04% and the 30 year is
yielding 3.04%. Yields are higher for
the week and lower for the year.
On Monday the S&P 500 index gained 34 points on moderate
volume as black Friday results showed positive results, new home sales were
higher, rumors from the Euro-zone indicated a new deal and China backed the
Tuesday the index added 3 points on moderate volume as US
consumer confidence rebounded sharply to a 4-month high and Italy completed a
successful debt auction. On the negative
side home prices were down.
Wednesday the index surged 52 points on heavy volume as central
banks around the world united to provide liquidity for the Euro-zone debt
crisis, China cut bank reserve requirement and Standard and Poors downgraded 15
global banks. In the US pending home
sales were higher, the ADP employment report beat expectations, productivity
was revised lower, Chicago area manufacturing was better than expected and the
Fed Beige Book showed economic expansion across the US.
Thursday the market lost 2 points on moderate volume as
weekly jobless claims were back above the 400k level, the ISM manufacturing
index beat expectations, November vehicle sales were solid, construction spending
was up and the Massachusetts Attorney General filed a lawsuit against five
mortgage lenders for unethical practices.
Friday the market was basically flat on moderate volume as the
economy added 120,000 jobs in November and unemployment moved lower to 8.6%
wrapping up the best week in the markets in 2 years.
Markets rallied around the world as central banks came
together with a plan to basically buy more time for Europe to repair its credit
issues. In the US economic data
continued to impress as the US economy
The November jobs report was the biggest economic news of the
week. Initially the report looked great
with job growth and an unemployment rate moving lower to 8.6%. The markets rallied at the open on Friday but
as the report was dissected it was less-positive than initially thought and the
market ended the day with mixed results.
Although 120,000 new jobs were created very few of them were in the
manufacturing sector. It is great to see
the unemployment rate move lower, below the 9% level but much of that was due
to individuals no longer looking for work rather than finding a job. Keep in mind the jobs numbers and
unemployment statistics can be misleading at times because they do not take
into consideration laid-off workers who either transition into self-employment or
into retirement after a period of collecting benefits.
All-in-all it was a great week for the markets and a pretty
positive week of economic news setting the stage for a possible Santa Clause
rally into the end of 2011! Happy
Mortgage rates were lower this week. The Schwab Bank 15-year rate is now at 3.375%
and the 30-year rate is at 4.08%. These rates are as of 12/02/2011 and assume
no points, no origination fee and a $250,000 conforming rate mortgage.
What to watch for on the economic calendar next week:
Monday – Factory Orders, ISM non-manufacturing index
Tuesday – No Major News
Wednesday – Consumer Credit
Thursday – Weekly Jobless Claims
Friday – Consumer Sentiment / International Trade
Ronald J. VanSurksum, CFP®
Advanced Asset Management, LLC
December 5, 2011