Market Perspective for November 25, 2016

Major averages continued to set new all-time highs throughout the abbreviated holiday week. The Dow cleared 19,000, the S&P 500 index rose more than 1 percent to break above 2,200 and the Nasdaq was up slightly less than 1 percent to almost 5,400. The financial, telecommunication and technology sectors led the rally. On Wednesday, the U.S. dollar index rose sharply, and the price of gold dropped approximately $30 per ounce to a nine-month low of $1,180.90.  West Texas Intermediate Crude rose to nearly $50 per barrel on news that OPEC may be close to a production agreement, but settled below $48 after weekly inventory data reflected a large build in gasoline stockpiles. OPEC oil ministers are expected to meet Wednesday in Vienna. Shares of the Energy Select Sector SPDR ETF (XLE) rose almost 2.5 percent this week.

European Central Bank (ECB) President Mario Draghi spoke Monday before the European parliament. He reiterated that the Eurozone is recovering at a moderate pace and the unemployment rate is declining. Notes from the most recent FOMC meeting confirm confidence that the strengthening economy will justify a December rate hike.

U.S. existing home sales rose to their highest level in more than nine years, despite rising prices and higher mortgage rates. The forecast was for a slight decrease. Sales of new homes unexpectedly fell 1.9 percent last month. The weekly mortgage application index rose over 4 percent. Durable goods orders increased 4.8 percent to handily beat consensus estimates of 1.5 percent. As expected, weekly unemployment claims rose slightly, though initial jobless claims have been below 300,000 for the past 90 weeks. The University of Michigan Consumer sentiment index rose to 93.8, more than 8 points above its pre-election figure.

Tyson Food (TSN) shares fell approximately 15 percent lower-than-expected fourth quarter earnings and revenues and news that CEO Donnie Smith will step down at the end of the year. Hewlett Packard Enterprises (HPE) shares were down by more than 4 percent before recovering following disappointing earnings and revenues and a security breach that compromised the personal information of more than 134,000 current and former U.S. Naval personnel.

Dollar Tree (DLTR) shares rose more than 12 percent on Tuesday after beating earnings and revenue expectations. Existing same-store sales increased a better-than-expected 1.7 percent due to higher foot traffic and an uptick in average spending per customer. John Deere and Company (DE) hit an all-time high of $104 per share on Wednesday with earnings and revenues that beat expectations and improved sales guidance as crop prices recover.

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