Markets saw new heights last week as the S&P 500 and the NASDAQ both registered all-time new highs. Not to be ignored, the Dow Jones and MSCI World Indices also traded within striking distance of their all-time highs.
The weekly gains were fueled by a plethora of earnings, economic reports, Fed action, and general geopolitical optimism. 3rd quarter earnings continue to be reported over the next couple of weeks, with the greatest number to be released this week. As it stands, roughly three fourths of the S&P 500 earnings have been released with three quarters of those firms beating expectations.
The initial reading of 3rd Quarter GDP was released midweek with a slight beat in expectations showing an annual rate of 1.9%. This news was shadowed by the FOMC Meeting later in the day. For the third time this year, the Fed voted to lower interest rates by 25 basis points to 1.5% to 1.75%. Most notably from this meeting, Fed Chairman Jerome Powell stated in the post-meeting press conference
“We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the state of the economy remains broadly consistent with our outlook,” signaling an end to the interest rate reductions for the time being. This news took the S&P 500 to new all-time highs by the close on Wednesday.
Finally, Friday’s Employment situation report beat expectations with both the October result and the revisions to the prior two months. Domestic indices traded sharply higher on the news with the S&P 500 closing at the highs of the day.
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®).