Records continue to be broken. The S&P 500 crossed above 3,300 for the first time last week. Meanwhile, the Dow Jones Average also marked its own major milestone, trading over 29,000 for the first time ever. But the greatest weekly gains across the major markets were in the NASDAQ as it surpassed 9,300 with a weekly gain of 2.29%.
At the sector level, only Energy ended lower as Oil and Natural Gas fell again last week. The remaining 10 sectors closed higher with 6 of those segments rising 2% or more last week.
In geopolitical news, The U.S. and China finally completed the signing of the Phase One Trade deal last Wednesday. In the deal, China agreed to buy an additional $200 billion worth of American goods and services more than it did in 2017 over the next two years. This works out to be roughly a 41% increase in exports for 2020 and a 65% increase in 2021. These are numbers that some analysts have said China will have a challenge to actually achieve in the coming years, especially considering the recent drop in US exports to China.
In economic news, the Consumer Price Index was released last week showing that the Unadjusted 12-month CPI for All Items rose by 2.3%. This is the highest December reading since 2011, but still remarkably low by historical standards. Yet, the Core CPI, a measure of the Inflation excluding food and energy, increased only 0.1% in December.
These results reinforce the Federal Reserve’s desire to keep interest rates unchanged for the time being. Currently, there is little expectation that the Fed will raise or lower rates at all in 2020.
Interest rates remained steady last week with the 10-year ticking up to 1.84% from the prior week’s reading of 1.83. This is 8 basis points below the 2019 year end close of 1.92%.
The S&P 500® Index is a capitalization index of 500 stock-designed to measure performance of the broad domestic economy through changes in the aggregate market value of stock representing all major industries.
The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.
The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes over 2,500 companies, more than most other stock market indexes. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indexes
The MSCI World Index, which is part of The Modern Index Strategy, is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI World benchmark does not offer exposure to emerging markets.
The MSCI Emerging Markets (EM) Index is designed to represent the performance of large- and mid-cap securities in 24 Emerging Markets countries of the Americas, Europe, the Middle East, Africa and Asia. As of December 2017 it had more than 830 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country.
The S&P GSCI Crude Oil index provides investors with a reliable and publicly available benchmark for investment performance in the crude oil market.
Companies in the S&P 500 Sector Indices are classified based on the Global Industry Classification Standard (GICS®).