Weekly Market Wrap: The “Supercommitte” announced their failure to
make a deal and continuing Europe woes pushed the markets lower this holiday
week. The S&P 500 slumped another
4.69% to close at 1,158.67. Gold and Oil
continued to trend lower this week as well.
Gold was 2.44% lower at $1,680.78 and Oil was 0.93% lower at
$96.50. The Dollar moved higher against
other major world currencies at $79.60 up nearly 2%.
Year-To-Date for the major indexes: The S&P index
-7.87%, The Dow Jones Index -2.98, The NASDAQ -7.97%, The Russell 2000 Small cap
Index -14.99, EAFE International -20.33%.
The 10 year treasury is currently yielding 1.97% and the 30 year is
yielding 2.92%. Yields are lower for the
week and lower for the year.
On Monday the S&P 500 index dropped 23 points on moderate
volume as the US Supercommittee announces failure to reach a deal, China warns
on economic struggles and US existing home sales increased.
Tuesday the index lost 5 points on moderate volume as US 3rd
Quarter GDP was revised downward from 2.5% to 2%, Mid-Atlantic manufacturing
data was higher and Moody announced no US credit downgrade. In Europe the IMF committed support to the
Wednesday the index slumped 26 points on moderate volume as China
and Europe manufacturing data was lower and a German bond auction was more
difficult than expected. In the US
durable goods orders were lower, consumer sentiment was revised lower, weekly jobless
claims were up slightly, personal spending was lower and personal incomes were
Thursday the markets were closed – I hope you all had a HAPPY
Friday the market 3 points on light volume as Germany
reiterated its opposition to Euro-bonds and an Italian debt auction pushed
yields above 7%.
The European debt crisis is really beginning to show up in the
bond yields of various European countries.
Yields above 7% are considered to be unsustainable and much of Italy’s
debt is now above that level making it very difficult for them to borrow any
additional money. German yields have
pushed higher as well but at a much more reasonable rate of 2%.
The economic numbers this week were a bit disappointing but the
trend is still better and nothing this week was bad enough to indicate a
reversal. Housing continued to show an
improvement with better than expected existing home sales data on Monday.
The markets indicated a sigh of relief on Tuesday when Moody’s
indicated that it will not downgrade US debt any further based on the
Black Friday seemed to be a huge success for the retailers and
hopefully is just the beginning of a great holiday season.
Mortgage rates were higher this week. The Schwab Bank 15-year rate is now at 3.5%
and the 30-year rate is at 4.21%. These rates are as of 11/25/2011 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 – New Home Sales
Tuesday – Consumer Confidence / Home Prices
Wednesday – Pending Home Sales / ADP Employment / Productivity
Thursday –Weekly Jobless Claims / ISM Manufacturing / Motor Vehicle Sales
Friday – Employment Situation
Ronald J. VanSurksum, CFP®
Advanced Asset Management, LLC
November 28, 2011