The record-breaking streak continued last week as the Nasdaq, Dow Jones, S&P 500, and the MSCI World Index all reached new all-time highs last week. While the MSCI Emerging Market hasn’t broken any records recently, this international index did lead the major markets last week.
“Phase One” Trade optimism continued to be the primary factor carrying market sentiment higher. As the final details of the deal get worked out, China has been pressing the Trump administration for the removal of the 15% tariffs on roughly $125 billion worth of Chinese goods that went into effect on September 1st. Additionally, this deal should avoid the proposed December 15th 15% tariff on an additional $156 billion of goods.
While mid-December is not known to be an eventful time for the markets, there may be some more excitement this year depending on how the trade deal continues to develop. Additionally, the United Kingdom will hold general elections on December 12th which will hopefully lead to some permanent direction on the Brexit front. Brexit Party Leader Nigel Farage announced over the weekend that he would back off an earlier plan to have his party contest all 650 House of Commons seats which would have jeopardized the 317 seats won by conservatives in the 2017 election. This earlier plan may have split the pro-Brexit vote and further mired the country in the current Brexit stalemate.
With the bulk of the quarterly earnings reports now released, the S&P 500 sectors closed mostly higher. The notable exceptions were the Real Estate and Utilities sectors seeing sizable losses last week. These segments came under heavy pressure due to recent increases in interest rates. The 10-year yield rose from 1.73% to 1.94% over the last 5 sessions. But this same curve-steepening led to the gains in the Financials which saw the best performance among the sectors last week.
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®).