Market Perspective for December 31, 2018

Many foreign markets were closed for the New Year’s Day holiday. U.S. bond markets closed early, but the stock markets had a full trading day. The Dow Jones Industrial Average climbed 1.15 percent to lead the major indexes. For the year, the S&P 500 Index closed with a negative return of 6.24 percent. Healthcare was the best performing sector in 2018; SPDR Healthcare (XLV) rose 6.21 percent.

Economic reports will pick up this week with manufacturing PMIs and motor vehicle sales for December being releases. Economists forecast both numbers will cool from November’s pace, but remain near 12-month highs.

The consensus forecast says Friday’s employment report will show 185,000 new jobs in December and a lower unemployment rate of 3.6 percent. There were 155,000 jobs created in November.

The Commerce Department and its Bureau of Economic Analysis stopped reporting data during the government shutdown. If the shutdown ends, November construction spending is slated for release this week.

Crude oil rallied near $46 per barrel on Monday. Natural gas fell below $3 per mmBTU, down from $5 in mid-November.

 

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