During a week while many were thankful, the markets gave us much to be thankful for. Through the four-day trading week, the Dow gained 1.51%, the S&P 500 was up 1.44%, the NASDAQ added 1.45%, and the MSCI EAFE increased 1.26%.
U.S. Dollar/ Euro move closer together: A combination of positive news in the United States and ongoing economic challenges in Europe have moved the dollar and euro increasingly closer together for the past three weeks. In fact, Deutsche Bank now predicts parity between the two currencies by the second quarter of 2017— and the dollar to be worth more than the euro by the third quarter. The two currencies have not had equal value since November 2002. At the euro’s highest in July 2008, it was worth more than 1.6 times as much as the dollar.
A rising dollar signals our economic strength but can also negatively affect exports. While we wait to see whether EUR/USD parity is ahead, we will say: If you have European travels planned, the favorable exchange rate is certain to be welcome news.
Oil continues to falter: Of course, not everything can be perfect in the markets. Oil continued its patchy performance to close at $47.24 on Friday. OPEC meets this week, and no one knows whether they will be able to reach a deal for oil producers to curb production. As of now, the markets are still oversaturated with oil, but we’re significantly above the 10-year low of below $30 per barrel that we reached earlier this year. If production stabilizes and prices rise to a more sustainable level, then oil companies will be better able to invest in new long-term projects. For the meantime, enjoy the low gas prices while they last — as we all wait to see how OPEC and the major oil producers decide to move forward.
As we’ve mentioned in recent market updates, the Federal Reserve’s December meeting remains the next big event on the economic calendar. The odds of an interest-rate increase are now nearly 100%. But if 2016 has shown us anything, it’s that even highly predicted outcomes don’t always occur. In the meantime, we remain thankful for the recent market growth and continue to focus on your long-term interests. As always, we appreciate you trusting us to care for your family and financial future.
ECONOMIC CALENDAR:
Tuesday: GDP
Wednesday: ADP Employment Report, Personal Income and Outlays
Thursday: Motor Vehicle Sales, Jobless Claims, PMI Manufacturing Report
Friday: Employment Situation Data as of 11/25/2016 | 1-Week | Since 1/1/16 | 1-Year | 5-Year | 10-Year | S&P 500 | 1.44% | 8.29% | 5.96% | 18.21% | 5.80% | DOW | 1.51% | 9.91% | 7.52% | 14.10% | 5.60% | NASDAQ | 1.45% | 7.82% | 5.53% | 24.23% | 11.94% | U.S. Corporate Bond Index | -0.11% | 4.76% | 4.15% | 4.35% | 6.59% | International | 1.26% | -5.95% | -6.76% | 2.88% | -1.98% | Data as of 11/25/2016 | 1 mo. | 6 mo. | 1 yr. | 5 yr. | 10 yr. | Treasury Yields (CMT) | 0.34% | 0.62% | 0.81% | 1.83% | 2.36% |
Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance, S&P Dow Jones Indices and Treasury.gov. International performance is represented by the MSCI EAFE Index. Corporate bond performance is represented by the SPUSCIG. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. |
