Market Perspective for January 3, 2020

The Nasdaq increased 0.18 percent over the holiday shortened week, while the Dow Jones Industrial Average fell 0.03 percent and the S&P 500 Index 0.14 percent.

During 2019, Invesco QQQ (QQQ) advanced 38.96 percent. SPDR S&P 500 (SPY) gained 31.22 percent, SPDR DJIA 25.03 percent and iShares Russell (IWM) 25.39 percent.

Industrials were a strong performer this week thanks to a rally in defense stocks. SPDR Industrials (XLI) advanced 1.15 percent. SPDR S&P Aerospace & Defense (XAR) returned 4.25 percent on the week after the U.S. killed a top Iranian military official following attacks on the U.S. embassy in Baghdad. Global markets moved overnight on the news, with gains in oil and gold, and a slump in equities on Friday. U.S. Oil (USO) increased 2.07 percent for the week, while SPDR Gold Shares (GLD) gained 2.51 percent.

Manufacturing PMIs showed improved activity in the U.S., Germany and China last month. The Conference Board’s December consumer confidence survey came in below expectations, but only 0.3 points off the November reading.

Weekly jobless claims were 222,000, consistent with the past results. Construction spending was better than expected in November. It rose 0.6 percent, 0.1 percent better than forecasts.

The 10-year Treasury yield slipped to 1.79 percent, the lowest since mid-December. iShares High Yield Corporate Bond (HYG) increased 0.35 percent, Fidelity Corporate Bond (FCOR) 0.33 percent and Invesco Senior Loan (BKLN) 0.31 percent.

 

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