Market Perspective for December 16, 2019

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.

 

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