U.S. and World News
- Washington D.C. was squarely in focus this week. First, the U.S. Senate narrowly passed its version of the tax reform bill last weekend, sending stock markets decidedly higher. Republicans still need to overcome some obstacles between the House and Senate versions to craft a joint bill, which will then be brought to President Trump. Meanwhile, the White house announced that it will move forward with a massive infrastructure program in 2018. Then, the Senate Banking Committee approved the nomination of Jerome Powell as Janet Yellenís successor as the Fed Chair. Finally, a stop-gap spending measure has been signed which continues funding the federal government for two weeks, at least temporarily preventing a government shutdown.
- Wildfires raging across Southern California have caused massive amounts of damage to a region that has been hit extremely hard by fires this year and has forced thousands of residents to evacuate. Affecting industries from technology to oil fields to winemakers, the massive fires are still burning and this will go down as one of the most devastating fire seasons ever for insurance losses, which are estimated to have reached $10 billion in 2017.
- Markets were up this week following news of the tax reform bill passing the Senate. The S&P gained 0.39%, closing at a new All-Time High of 2,642. The Dow Jones rose 0.46% for the week and closed at 24,232, also a new All-Time High. Year to date, the S&P is up 20.72% and the Dow is up 26.07%.
- Interest rates were slightly higher for the week. The 5 year and 10 year U.S. Treasury Notes are now yielding 2.15% and 2.38%, respectively.
- The spot price of WTI Crude Oil dipped by 1.77% this week, closing at $57.33 per barrel. Year to date, Oil prices have risen 6.72%.
- The spot price of Gold ended the week off by 2.55%, closing at $1,247.9 per ounce. Year to date, Gold prices are up 8.75%.
- Initial jobless claims dropped 2,000 from last week, coming in at 236,000. The level of claims remains elevated in Puerto Rico, as the labor department notes that the claims filing process continues to be disrupted in the Virgin Islands. The four week moving average for claims was unchanged at 242,000.
- The November payrolls report showed a gain of 228,000 jobs, better than consensus expectations of 195,000. It appears that Novemberís figure received at least some boost from post-hurricane normalization. With the prior two monthsí figures being revised down a combined 4,000 jobs, the three month average for job gains now stands at 170,000.
- The headline unemployment rate remained at 4.1%, in line with expectations. The labor force participation also held steady at 62.7%, consistent with expectations.
- Average hourly earnings rose 0.2% in the month, lower than the 0.3% that was expected. Wage growth over the last 12 months has totaled 2.5%.
- The University of Michiganís consumer sentiment index declined 1.7 points to 96.8 in the preliminary December reading, lower than expectations but still near the post-crisis highs. The report was mixed, with the assessment of current conditions improving but the expectations of the future component falling.
Fact of the Week
- For the 7 years from 2010 to 2016, the S&P 500 experienced 417 trading days in which the index gained or lost at least 1% for the day, an average of 60 trading days per year. So far in 2017, the S&P 500 has only had 9 trading days of +/- 1% movement. (Source: BTN Research)
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