The Dow soared over 300 points on the last day of November to close above 24000 for the first time in its history. Hopes for a tax overhaul may have contributed to investor confidence in equities. Each of the benchmark indexes listed here posted favorable monthly gains. The Nasdaq continued its strong performance in 2017, gaining over 2.0% in November, while the small caps of the Russell 2000 climbed close to 3.0%. After gaining 2.8% for November, the S&P 500 joined the Dow in posting its eighth consecutive month of positive returns. With stocks climbing, it’s not surprising that long-term bond prices fell, as evidenced by the yield on 10-year Treasuries, which jumped 4 basis points over October’s end-of-month yield.
|Market/Index||2016 Close||As of November 30||Month Change||Quarter Change||YTD Change|
|Fed. Funds||0.50%-0.75%||1.00%-1.25%||1.00%-1.25%||0 bps||50 bps|
|10-year Treasuries||2.44%||2.37%||4 bps||3 bps||-7 bps|
Equities data reflect price changes, not total return.
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Last Month’s Economic News
*Employment: Total employment rose by 261,000 in October following September’s job reduction. The unemployment rate edged down to 4.1%. The number of unemployed persons declined by 281,000 to 6.5 million. Since January, the unemployment rate has declined by 0.7 percentage point, and the number of unemployed persons has decreased by 1.1 million. The labor participation rate decreased by 0.4 percentage point to 62.7%. The average workweek for all employees remained at 34.4 hours in October. Average hourly earnings fell by $0.02 to $26.53 after rising $0.12 in September. Over the 12 months ended in October, average hourly earnings have risen $0.63, or 2.4%.
*The Consumer Price Index, which rose 0.5% in September, edged up only 0.1% in October. For the 12 months ended in October, consumer prices are up 2.0%, a mark that approaches the Fed’s 2.0% target for inflation. Core prices, which exclude food and energy, increased 0.2% in October, and are up 1.8% over the prior 12 months.
*The Producer Price Index showed the prices companies receive for goods and services advanced 0.4% in October, the same increase as in September. Year-over-year, producer prices have increased 2.8%. Prices less food and energy increased 0.4% for the month and are up 2.3% over the past 12 months.
Eye on the Month Ahead
All indications are that the Federal Reserve will relax stimulus measures by increasing the federal funds interest rate when the Committee meets this month. December should be a good month for consumer spending on the heels of robust consumer sales on Black Friday and Cyber Monday. While trading usually slows during December, stocks are expected to close the year ahead of their 2016 values.
Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation);
U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); http://www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.
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