Weekly Market Wrap: Stocks moved higher this week as market
volatility continued and Europe moved towards a resolution of their debt issues
(but still a long way to go). The
S&P 500 index gained 0.85% to close at 1,263.85. Gold and oil moved higher on the week as
well. Oil surged nearly 6% to close at
$99.98 and Gold added almost 2% to close at $1,787.90. The Dollar was 0.14% lower this week against
other major world currencies closing at $76.90.
Year-To-Date for the major indexes: The S&P index
+0.49%, The Dow Jones Index +4.98, The NASDAQ +0.98%, The Russell 2000 Small cap
Index -4.98%, EAFE International -11.91%.
The 10 year treasury is currently yielding 2.06% and the 30 year is
yielding 3.11%. Yields are slightly higher
for the week and lower for the year.
On Monday the S&P 500 index added 8 points on light volume
as the Greece Prime Minister announced his resignation while a new government
is formed and the Italian PM is rumored to set down. In the US September consumer spending was
better than expected and consumer credit expanded.
Tuesday the index rose an additional 15 points on light volume
as Italy votes down the Prime Minister’s majority and the PM announced his
resignation. In the US job openings grow.
Wednesday the index plummeted 47 points on moderate to heavy
volume as Italian bonds are sold pushing the yield above a problematic 7%
level. In the US mortgage applications increased
and Fannie Mae announced that they will seek additional aid from the federal
government (and US taxpayers).
Thursday stocks added 11 points on moderate volume as Italy’s
bond concerns eased after a successful bond auction and US initial jobless
claims fell to a 7-month low and under the $400,000 level.
Friday the market gained 24 points on light volume as the
Italian senate passed austerity measures and consumer sentiment in the US rose.
Europe and Italy moved the markets this week as Europe continues
to get a grip on its debt problems and work towards avoiding defaults. Both Greece and Italy are replacing their
leadership in an attempt to move their budgets in a different direction. Italian bonds were pushed lower on Wednesday as margin requirements for holding the bonds were increased possibly forcing
sales and pushing the yields above 7%.
By the end of the day yields were back down and on Thursday a successful
Italian bond auction pushed yields lower and soothed investors.
In the US trading was mostly light,
excluding Wednesday’s drop, and the economic data was pretty positive. Jobs may finally be on the up-tick as claims
fell to a 7-month low and a separate report on jobs available was better than
expected. Data also showed that consumers
may be ready to start spending which would give a much needed boost to our
Mortgage rates moved lower this week. The Schwab Bank 15-year rate is now at 3.375%
and the 30-year rate is at 4.125%. These rates are as of 11/11/2011 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 – No major releases
Tuesday – Producer Price Index / Retail Sales
Wednesday – Consumer Price Index / Industrial Production
Thursday –Weekly Jobless Claims / Housing Starts / Philly Fed Survey
Friday – Leading Indicators
Ronald J. VanSurksum, CFP®
Advanced Asset Management, LLC
November 14, 2011