Market Perspective for November 29, 2019

Equities enjoyed a holiday rally as economic data showed a strengthening economy. The Nasdaq advanced 1.75 percent, the S&P 500 Index 1.04 percent and the Dow Jones Industrial Average 0.73 percent on the week.

SPDR Technology (XLK) climbed 1.80 percent for the week, SPDR Consumer Discretionary (XLY) 1.76 percent and SPDR Healthcare (XLV) 1.28 percent. Holiday shopping season sparked optimism in the retail sector this week. SPDR S&P Retail (XRT) climbed 2.09 percent. Amazon (AMZN) advanced 3.45 percent. Disney’s rollout of its streaming service, along with its holiday movie lineup, boosted its shares 2.43 percent.

Investors continue to favor high-quality and low volatility shares. Vanguard Dividend Appreciation (VIG) increased 0.93 percent and iShares Edge MSCI Minimum Volatility USA (USMV) 1.00 percent.

Economic data showed the U.S. economy was stronger than initially believed in the third quarter. The Bureau of Economic Analysis increased its third quarter GDP growth estimate from 1.9 percent to 2.1 percent.

New homes sales were stronger than expected. October sales hit an annualized pace of 733,000, higher than the forecast. September sales were revised higher to 738,000. iShares U.S. Home Construction (ITB) gained 1.79 percent on the week.

Consumer confidence declined slightly in November, according to the Conference Board’s survey. Still, confidence remains near multi-year highs. Weekly initial claims for unemployment were 213,000, still near four-decade lows. Durable goods orders increased 0.6 percent in October, far ahead of a forecast decline of 1.2 percent. Consumer spending rose 0.3 percent in October, faster than expected.

Bonds rallied across the board this week as interest rates came down. The 10-year Treasury finished the week at 1.78 percent. iShares iBoxx High Yield Corporate Bond (HYG) gained 0.30 percent for the week. Fidelity Corporate Bond (FCOR) climbed 0.39 percent.

The U.S. Dollar Index held steady this week. iShares Latin America 40 (ILF) fell 2.72 percent, while iShares MSCI Emerging Markets (EEM) down 0.76 percent. iShares China Large-Cap (FXI) slid 0.94 percent after the U.S. Congress passed and President Trump signed a bill supporting Hong Kong protests.

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