Market Week: December 10, 2012

The Markets

The tech-heavy Nasdaq suffered from a drop in Apple’s stock. However, other indices managed small gains for the week as investors tried to balance anticipation of any potential Santa Claus rally with uncertainty about fiscal cliff talks in Washington.

 

Market/Index 2011 Close Prior Week As of 12/7 Week Change YTD Change
DJIA 12217.56 13025.58 13155.13 .99% 7.67%
Nasdaq 2605.15 3010.24 2978.04 -1.07% 14.31%
S&P 500 1257.60 1416.18 1418.07 .13% 12.76%
Russell 2000 740.92 821.92 822.27 .04% 10.98%
Global Dow 1801.60 1942.07 1955.63 .70% 8.55%
Fed. Funds .25% .25% .25% 0 bps 0 bps
10-year Treasuries 1.89% 1.62% 1.64% 2 bps -25 bps

Equities data reflect price changes, not total return.

Last Week’s Headlines

  • The unemployment rate continued to fall in November, hitting its lowest point since December 2008. Hurricane Sandy had minimal impact, but the addition of 148,000 jobs and an increase in the number of people halting job searches cut unemployment to 7.7% from 7.9%. According to the Bureau of Labor Statistics, that’s a full percentage point lower than a year ago.
  • U.S. manufacturing contracted for the fourth time in six months, according to the Institute for Supply Management, whose manufacturing index fell to 49.5% in November (any number below 50 indicates contraction). However, the ISM’s measure of the services sector for November grew for the 35th straight month; the 54.7% reading showed growth increasing more rapidly than in October.
  • The Census Bureau reported that construction spending rose 1.4% in October and was nearly 10% above October 2011. A 3% increase in private residential construction played a large role in October’s growth, though nonresidential construction also was up by 0.3%.
  • Greece offered to pay private bondholders anywhere from 30% to 40% of face value (depending on maturities) to buy back sovereign bonds in order to reduce its debt burden, and extended its deadline for a response until Tuesday, December 11. Greece needs a successful buyback program in order to receive its next installment of financial aid.

Eye on the Week Ahead

The Fed will issue its most recent forecasts for the economy, while the clock continues to tick on discussions about the fiscal cliff that will help determine the accuracy of those forecasts.

Key dates and data releases: balance of trade (12/11); Federal Open Market Committee meeting/forecasts, import/export prices (12/12); wholesale inflation, retail sales, 30-year Treasury bond auction (12/13); consumer inflation, industrial production (12/14).

Data sources: Includes data provided by Brounes & Associates. 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.

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 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

This information is not intended to be a substitute for specific individualized tax or investment advice.  We suggest that you discuss your specific tax and investment situation with qualified tax and investment professionals. No strategy assures success.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2012.