Market Synopsis: Equities mixed, Treasury Yields up, Commodities mixed, Dollar down, Crypto flat
Past Week Event(s):
- Consumer confidence index was released this week on Wednesday. This index acts as a measure of consumer sentiment, which paints a picture of the broader economy. The index registered at 108.3 this month illustrating an increase in consumer confidence which gave some optimism for markets about the economy.
- PCE price index measures how much consumers are spending for their goods and services. This data point reveals information about how inflation is affecting the market, because this data point excludes random volatility in price changes of specific goods to only specifically target inflation’s impact. This data point is very similar to CPI, and like CPI is very important to measuring inflation. It is a very critical inflation indicator for the Federal Reserve and because of the fact it came in cooler than expected markets rallied on Friday.
Next Week (December 5):
- Pending home sales index indicates the level of housing activity in the market. As of late, the Fed’s efforts in hiking interest rates to reduce inflation have been working, but the effect on the housing market has been negative. Normally raising interest rates lowers consumer confidence and spending, so in this sense that trend makes sense. Investors will see which direction the housing market will continue to head in.
- Christmas is coming up on December 25. Christmas normally grows the economy in the sense that it boosts retail sales. Happy Holidays!
Market Snapshot:
- Markets had a bumpy week with a few macro headlines like PCE and the Consumer Confidence Index. Overall, though, markets remained unchanged on the week. The Consumer Confidence Index helped ease concerns about the economy slightly due to the increase in consumer sentiment. PCE, similarly, painted a good picture for markets as it demonstrated slight moderation in prices. Markets are still on edge though as beliefs in a soft landing seem to be waning. Markets are closed on Monday for Christmas and will re-open on Tuesday.
U.S Equities:
Indexes(Week)
SPX 3,844.82(-0.20%), DJIA 33,203.93(0.86%),
NASDAQ 10,497.86(-1.94%), RUT 1,760.93(-0.14%)
Sectors
- It was a mixed bag in terms of the returns in individual sectors. Energy on one hand outperformed all other sectors rising almost 3 percent whereas Consumer discretionary and Technology lagged behind falling about 2 percent and 3 percent respectively.
Individual ETF to Note
- TLT is a very fundamental ETF that investors should be aware of. Fixed income is a necessary part of almost all healthy and diversified portfolios. Treasuries specifically, are very attractive investments right now due to the elevated yields and low prices. An excellent way to gain exposure and capitalize on this historic buying opportunity would be through an ETF. TLT serves to track 20+ Treasury Year bonds. If you are looking to gain exposure to Treasury bonds an ETF like TLT should be something to consider. However, many other methods exist like buying Treasuries at auction or on the secondary market.
Treasuries:
- Bonds had a slightly shortened week due to Christmas coming up this Sunday. The Bond market stopped trading at 2 p.m. ET today to began the holiday weekend. All Treasuries were dumped this week sending their respective yields higher. The 30yr treasury bond saw the largest increase this week.
Commodities:
Oil
- Oil had a great week rallying to over 80$ a barrel this week. This week is the second week in Oil’s massive rally from lows below 70$ a barrel representing its best week since October.
Gold
- Gold was unchanged this week. This is the 3rd week in a row where gold has basically remained unchanged. This is despite the fact that there has been massive intra-day volatility.
BTC -16,765, -0.42% ETH - 1,217.73, 1.94%
- Similar to gold, crypto has in large part remained unchanged. Sam Bankman Fried was just released on a 250 million dollar bail where he will be placed under house arrest. The collapse of FTX has sent shockwaves throughout the crypto community and has some saying that the industry has been set back 10 years.
Europe:
Stoxx 600- 427.45, 0.64% DAX -13,940, 0.34% FTSE 100 -7,473, 1.92%
Chart of the DAX (5-day)
- In light of an annual inflation increase of 85% recently in Turkey, they have decided to raise the monthly minimum wage by 55%. A hike was necessary for Turkish consumers, but reps of the employee union could not reach an agreeable number. So the government took a course of action and decided to increase the wage by 55%. This is causing an understandable amount of panic, because businesses are worried about employee costs and how the Turkish economy will also fare out.
Asia:
XJO (Australia)-7,107, -0.57% Shanghai 180 Index-8,135, -3.32% Nikkei 225- 26,235, -4.69%
XJO 5-day Chart
Comments