The political world has presented many topics of conversation lately. But one discussion has been relatively quiet: tax reform. Last week, however, the president announced that a “phenomenal” tax plan is forthcoming, and domestic markets responded by reaching record highs.[1] In fact, we saw positive market performance even before the announcement, as the S&P 500 and Dow posted new records two days in a row, while the NASDAQ reached record highs every day except Monday.[2] By Friday, the Dow was up 0.99%, the NASDAQ added 1.19%, and the S&P 500 capped its fourth consecutive week of gains to increase by 0.81%.[3] On the other hand, the MSCI EAFE languished this week, posting a 0.03% loss.[4]
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Looking at Labor
Political headlines continued to fill the news last week, and while domestic markets declined during mid-week trading, they rebounded on Friday, February 3.[1] Overall, the week showed only modest movement, as the S&P 500 added 0.12%, the NASDAQ was up 0.11% to end at a record high, and the MSCI EAFE grew by 0.01%.[2] The Dow was down by 0.11% but still managed to end above 20,000 after dipping below this benchmark between Tuesday and Thursday.[3]
So, why did domestic markets perform well on Friday? A better-than-expected jobs report.[4]
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Stocks Up, GDP Down
After a brief pause during inauguration week, stocks continued to climb last week. The S&P 500 added 1.03%, the NASDAQ was up 1.90%, and the MSCI EAFE increased by 1.29%.[1] The Dow also grew, adding 1.34%, ending the week above while hitting 20,000 for the first time ever.[2]
Consumer confidence matched this positive performance, as the University of Michigan Consumer Sentiment measurement beat expectations in January and reached the highest levels since 2004.[3] However, one piece of data we received last week gave a less rosy view of the economy: initial GDP reports.
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Financials Up, Indexes Mixed
As we look back on markets last week, we see mixed results, with none of the major domestic indexes gaining or losing more than 1%.[1] The S&P 500 was down 0.10% for the week, and the Dow gave back 0.39%, once again failing to reach 20,000.[2] On the other hand, the NASDAQ increased by 0.96% and reached its sixth record close in 2017 on Friday—pushed by a 1.36% rally for Facebook after Raymond James upgraded its stock.[3] International stocks in the MSCI EAFE added 0.82%.[4]
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New Year Starts with Record Highs
The first trading week of 2017 is over, and during this time, all three major domestic indexes hit record highs. The DOW reached 19,999.63 in intra-day trading on Friday, January 6 —just 0.37 away from achieving 20,000 for the first time.[i] On the same day, the S&P 500 and NASDAQ both closed at record highs. For the week, the S&P 500 was up 1.70%, the Dow gained 1.02%, and the NASDAQ added 2.56%.[ii] International stocks in the MSCI EAFE increased by 1.77%.[iii]
To say that 2017 has started differently than 2016 would be an understatement. This time last year, we ended the week with all three indexes dropping at least 5.96% on fears about China’s economy.[iv]
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2016 In Review
January 3, 2017
Looking back on the final trading week of a very eventful year, we saw low volume and a break from the recent rallies for domestic indexes. While international stocks in the MSCI EAFE added 0.56%, all major U.S. indexes declined.[1] The S&P 500 lost 1.10%, the Dow was down 0.86%, and the NASDAQ gave back 1.46%.[2] For the first time since November 4, the indexes posted three straight days of losses.[3] Despite these last-minute decreases, 2016 ended very differently than it began.
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Slow, But Positive, Trading Week
December 27, 2016
In the last full trading week of 2016, domestic markets were relatively quiet, with many people out of the office for the holidays. Nonetheless, all three major domestic indexes ended the week in positive territory. The S&P 500 was up 0.25%, the Dow gained 0.46%, and the NASDAQ added 0.47%.[1] International equities in the MSCI EAFE were also up, increasing by 0.36%.[2] The Dow continued to flirt with surpassing the 20,000 mark for the first time—reaching within fewer than 13 points at its highest trading point on Wednesday, December 20—before closing at 19,933.81 for the week.[3]
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Fed Raises Rates
December 19, 2016
Last week was mixed for the markets, as the Dow increased by 0.44%, while the S&P 500 lost 0.06%, the NASDAQ dropped 0.13%, and the MSCI EAFE gave back 0.55%.[i] We also saw a variety of data released, giving a similarly mixed view of recent economic activity. Retail sales and the Consumer Price Index showed modest gains, while industrial production and housing starts both declined.[ii]
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Rational Exuberance?
December 12, 2016
On Friday, December 9, all three major U.S. stock indexes ended at record high. For the first time in five years, they each posted gains every day of the trading week.[1] The S&P 500 was up 3.08%, the Dow added 3.06%, and NASDAQ increased 3.59%.[2] International stocks in the MSCI EAFE even gained 2.9%, despite potential risks from the Italian referendum and impending end of the European Central Bank’s quantitative easing.[3]
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A Mixed View
December 5, 2016
After a three-week run where all major U.S. indexes posted significant gains, we saw more mixed results last week. The Dow was up 0.10%, but the S&P 500 lost 0.97% and the NASDAQ was down 2.65%. The MSCI EAFE’s measure of international developed markets also dropped 0.24%.[1]
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