Stocks Gain on Mixed Economic Data; Bonds Rise Modestly

The Dow (+2.0%), NASDAQ (+1.7%) and S&P 500 (+1.7%) each gained modestly for the week.  Meanwhile taxable bonds and tax-free municipal bonds each rose about 0.2%.  The 10-year Treasury yield fell 0.02% to finish the week at 4.42%.

There was a mixed bag of economic data reported last week, but the markets advanced, anyway.  On a positive note, jobless claims fell to their lowest level since April, and the four-week moving average also remains very low.  These signal that the labor market continues to remain very strong, which bodes well heading into the holiday shopping season.  My once-favorite economic data point – Leading Economic Indicators (LEIs) - fell again last month, with the latest 6-month period being worse than the prior six months.  LEIs were once a very reliable predictor of a forthcoming recession, but that hasn’t happened (yet?).  The stock market darling, Nvidia, reported its much-anticipated earnings last week, and while its earnings growth continues on a torrid pace, the stock got punished for its forecasts not being as healthy as the past.

Volatility also continues due to escalating tensions in the Russia/Ukraine conflict, as the US permitted Ukraine to fire US-supplied missile deep into Russian territory.  Russia has threatened to response with nuclear weapons, but that could also be a ploy for negotiations, as a new administration is heading into Washington in a couple months.  There is also increased volatility due to uncertainty over what President-elect Trump may do and how the markets will react.  While there may be reasons to be concerned, there are also reasons to be optimistic.  Only time will tell.

Have a great day and a terrific week!

^{Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.}

^{The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.}