Weekly Market Wrap: Stocks drifted slightly higher this week as a better than expected jobs report and positive manufacturing data from overseas could not overcome a week of fiscal cliff negotiations with no progress.
For The Week
- The S&P 500 Index added 0.13% to 1,418.07
- Oil dropped 3.35% to $85.93
- Gold slipped 0.58% to $1,704.00
- The US Dollar gained 0.35% to $80.43 against other major world currencies.
Year-To-Date for the major indexes:
- The S&P index +12.76%
- The Dow Jones Index +7.67%
- The NASDAQ Index +14.31%
- The Russell 2000 Small cap Index +10.98%
- EAFE International Index +11.01%
- 10 Year Treasury Yield at 1.63%
- 30 Year Treasury Yield at 2.81%
- WTI Crude Oil Index -13.22%
- Bloomberg Gold Index +8.95%
- The Dollar Index +0.24% against other major world currencies
Monday the S&P 500 dropped 7 points on moderate volume as US manufacturing contracts, construction spending increases, auto sales were mixed and the GOP counter-offers on the fiscal cliff. Overseas, Chinese and European manufacturing beats expectations and Greece announced plans to repurchase some of its debt.
Tuesday stocks slipped 2 points on moderate volume as fiscal cliff worries overshadowed positive earnings reports.
Wednesday stocks gained 2 points on moderate volume as US service sector activity beat expectations, factory orders beat as well, employee productivity was up while labor costs were down, the ADP payroll report was below expectations, mortgage applications were lower and President Obama indicated that he thought the fiscal cliff could be solved in a week if Republican leaders would agree to tax increases on the “rich”. In China new leaders indicated a pro-growth policy.
Thursday stocks added 5 points on moderate volume as jobless claims beat expectations.
Friday stocks added 4 points on moderate volume as the November US jobs report beat expectations with 146,000 new jobs and a decrease in the unemployment rate to 7.7%. Also, consumer confidence dipped, consumer credit expanded more than expected and no progress was made this week on the fiscal cliff.
Takeaways from this week:
- Despite positive economic data the fiscal cliff concerns have kept a lid on stock market gains and will probably continue to do so until progress is made.
- Overseas data was positive from both Europe and China.
- With much of the current economic data coming in positive, a resolution to the fiscal cliff could move stocks considerably higher. Of course the opposite is true if no progress is made between now and January 1st. It should be an interesting final 3 weeks of 2012.
Mortgage rates were slightly lower again this week. The national averages as reported by Bloomberg indicate a 15-year rate of 2.83% and a 30-year rate of 3.39%. These rates are as of 12/07/2012 and may include points.
What to watch for on the economic calendar next week:
Monday – No major data releases
Tuesday – Small Business Optimism / International Trade
Wednesday – FOMC Meeting announcement and Forecasts / Treasury Budget
Thursday – Jobless Claims / Producer Prices / Retail Sales
Friday – Consumer Price Index / Industrial Production
Ronald J. VanSurksum, CFP®
Advanced Asset Management, LLC
December 9, 2012