General market news
- Yields moved higher last week after the Federal Reserve announced on Wednesday that it would increase the federal funds rate. The 10-year Treasury yield moved from 2.42 percent to as high as 2.64 percent on Thursday, opening this Monday morning at 2.55 percent. The 30-year yield went from about 3.08 percent to 3.20 percent on Thursday, before opening at 3.13 percent this Monday. The 2-year jumped from 1.15 percent to 1.39 percent last week but was back down to 1.22 percent on Monday.
- S. equities were a mixed bag last week, with the S&P 500 Index losing 0.03 percent and the Dow Jones Industrial Average gaining 0.45 percent. Both indices reached record highs early in the week before giving back some of their gains when the Fed announced the rate increase. Smaller-cap stocks, which have outperformed on the year, were the worst performers last week. Telecom and utilities stocks were the week’s best-performing sectors, while industrials and materials posted the worst performance.
- Last week’s economic news was led by the Fed’s decision to increase its policy rate by 25 basis points, a full year after its first rate hike last December. In addition to this hike, which puts the fed funds rate between 0.50 percent and 0.75 percent, the Fed projects three additional rate increases next year. In other news, consumer prices felt little pressure in November, with the headline Consumer Price Index increasing 0.2 percent for the month and 1.7 percent year-over-year. Core prices also increased 0.2 percent for the month, with the year-over-year rate remaining at 2.1 percent. Retail sales were somewhat disappointing in November, rising only 0.1 percent.
Equity Index | Week-to-Date | Month-to-Date | Year-to-Date | 12-Month |
S&P 500 | –0.03% | 2.78% | 12.84% | 11.33% |
Nasdaq Composite | –0.11% | 2.18% | 10.02% | 8.69% |
DJIA | 0.45% | 3.86% | 16.96% | 14.84% |
MSCI EAFE | –0.80% | 2.15% | 0.33% | 1.75% |
MSCI Emerging Markets | –2.17% | –0.44% | 10.72% | 11.61% |
Russell 2000 | –1.68% | 3.24% | 21.79% | 20.53% |
Source: Bloomberg
Fixed Income Index | Month-to-Date | Year-to-Date | 12-Month |
U.S. Broad Market | –0.96% | 1.52% | 1.25% |
U.S. Treasury | –1.03% | 0.11% | –0.31% |
U.S. Mortgages | –1.20% | 0.45% | 0.39% |
Municipal Bond | 0.30% | –0.62% | –0.49% |
Source: Morningstar Direct
What to look forward to
We will see housing data this week with releases of Existing and New Home Sales.
November Personal Income and Outlays data is expected to be fairly muted, and Durable Goods Orders are expected to have been weak.
The week will wrap up with the final estimate of third-quarter Gross Domestic Product, as well as Consumer Sentiment data.