Month: December 2019

Equities extended their rally as economic data shows the economy still strengthening. The Nasdaq rallied 2.14 percent, the S&P 500 Index 1.64 percent and the Dow Jones Industrial Average 1.14 percent.

SPDR Communication Services (XLC) rose 2.59 percent this week. SPDR Utilities (XLU) shrugged off rising interest rates and climbed 1.89 percent. SPDR Healthcare (XLV) extended its rally with a return of 1.86 percent. The pharmaceutical subsector powered the move. iShares U.S. Pharmaceuticals (IHE) advanced 3.62 percent and the small-cap leaning SPDR S&P Pharmaceuticals (XPH) popped 8.12 percent.

The flash manufacturing and services PMIs show the U.S. economy continues to expand in December. PMI readings in Europe show the economy struggling, though modestly improving.

The National Association of Homebuilder’s confidence index spiked to a 20-year high in December. Falling interest rates and strong demand for new homes has builders optimistic. Housing starts and building permits both increased from October and beat forecasts. iShares U.S. Home Construction (ITB) slipped 0.78 percent on the week, but it has rallied more than 20 percent since August.

The 10-year treasury yield hit 1.965 percent this week before setting at 1.92 percent on Friday. iShares 20+ Year Treasury (TLT) fell 1.56 percent. Higher-yielding bonds rallied on the strong economy and falling credit risk. Invesco Senior Loan (BKLN) increased 0.48 percent and iShares iBoxx High Yield Corporate Bond (HYG) 0.46 percent.

iShares MSCI Emerging Markets (EEM) advanced 2.57 percent on the week, well ahead of the 0.47-percent gain for iShares MSCI EAFE (EFA). iShares China Large Cap (FXI) gained 5.07 percent as the trade deal comes at a critical time for the Chinese economy.

Crude oil rallied above $60 per barrel this week. SPDR Energy (XLE) climbed 1.63 percent. First Trust ISE Revere Natural Gas (FCG) jumped 7.81 percent as a cold blast in the U.S. boosted natural gas prices.

Earnings season doesn’t begin in earnest until mid-January, but some major firms reported this week. FedEx (FDX) missed forecasts and its shares fell more than 10 percent. Micron Technology (MU), General Mills (GIS), Carnival (CCL) and ConAgra (CAG) delivered better results and saw their shares. CAG gained nearly 24 percent.

Stocks continued to rally on Monday, with the S&P 500 Index climbing 0.71 percent. Energy, utilities and healthcare were the best performing sectors. Crude oil climbed past $60 per barrel. SPDR Energy (XLE) climbed 1.46 percent. Bond yields rose on the day, yet SPDR Utilities (XLU) still increased 1.25 percent. Healthcare providers and small-cap pharmaceuticals powered the healthcare sector. SPDR Healthcare (XLV) rallied 1.08 percent. SPDR S&P Pharma (XPH) jumped 3.39 percent.

The flash manufacturing and services PMIs for December show a strengthening U.S. economy. The services number was up a half point from November’s reading.

November housing data starts will be released this week. Tuesday brings housing starts and building permits. Analysts are looking for an increase in the former and a small dip in the latter. Existing home sales are out on Thursday and are expected to be in line with the prior month’s sales pace.

The final revision to third quarter GDP is out this week. Government economists had previously hiked the growth rate to 2.1 percent.

The University of Michigan’s consumer sentiment survey is out on Friday and is expected to be very optimistic.

Chinese economic data was better than expected in November, thanks in part to what has become an annual online shopping holiday on November 11. iShares China Large Cap (FXI) climbed 1.26 percent. The Eurozone’s flash manufacturing PMI was 50.6 in December, slightly below expectations. German PMI remained below the 50 level that separates expansion from contraction. The United Kingdom’s stock market extended its post-election rally. iShares MSCI United Kingdom (EWU) advanced 2.09 percent on Monday.

Earnings are light this week, though FedEX (FDX) reports after the bell on Tuesday. Investors and economists dissect the international logistics company’s results because the firm has its pulse on emerging trends in the global economy. Micron Technology (MU) reports after the bell on Wednesday. Its memory business can signal turns in the cyclical semiconductor industry and the broader technology sector. General Mills (GIS), Paycheck (PAYX), Nike (NKE), CarMax (KMX) and Accenture (ACN) are the other companies delivering earnings this week.