During a week while many were thankful, the markets gave us much to be thankful for. Through the four-day trading week, the S&P 500 was up 1.44%, the Dow gained 1.51%, the NASDAQ added 1.45%, and the MSCI EAFE increased 1.26%.
What Happened This Week?
The S&P 500, Dow, and NASDAQ hit all-time highs: For the third straight week, the three major domestic indexes increased,and they all reached record highs. By market close on Friday, November 25, the S&P 500 was at 2,213.33, the Dow reached 19,152.14, and the NASDAQ was up to 5,398.92. Each of the indexes is now up over 7% for the year.
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- with 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 over-saturated 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. In the meantime, as we all wait to see how OPEC and the major oil producers decide to move forward, enjoy the low gas prices while they last.
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. For now, 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.
- Tuesday: GDP
- Wednesday: ADP Employment Report, Personal Income and Outlays
- Thursday: Motor Vehicle Sales, Jobless Claims, PMI Manufacturing Report
- Friday: Employment Situation
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