by Mariann Montagne, CFA
All data is for the week ended December 8, 2023
Stocks
U.S. stocks were higher last week with the benchmark S&P 500 increasing by 0.24%, the Russell 2000 rising 1.00% and the Nasdaq adding 0.70%. Overseas, the developed markets index (MSCI EAFE) rose 0.39% while the emerging markets index (MSCI EEM) declined 0.70%. By size, small caps led the gains. Communication services and consumer discretionary were the best performing sectors while energy and materials dragged down the overall averages.1
Fixed Income
Interest rates declined to their lowest level since the end of August, and bond values rose after a government report showed job openings declined. That drop reduces the pressure on labor costs and thus inflation. For the week, however, the benchmark 10-year treasury yield was little changed at 4.23%2 after a separate labor report was released on Friday. See Economic Data below.
Commodities
Oil prices fell again last week, with the price of West Texas crude down 3.83% to $71.23 per barrel.This marks a 22.33% drop from the recent high on Sept. 283 as investors are concerned that energy demand is falling in the U.S. and China while supply from the U.S. is at record highs.4
Economic Data
The U.S. job openings report showed there were 500,000 fewer jobs available than the consensus expectation and the previous month’s report. On a year-over-year basis, job openings were down 16.6%.5
Nonfarm payrolls rose by 199,000 in November, bringing the unemployment rate down a tick to 3.7%. However, after adjusting for the return of union workers (auto and actors) to the workforce, the rate was more in line with prior reports. Over the past twelve months, average hourly earnings grew by 4.0%, declining from previous monthly reports.6
Company News7
Advanced Micro Devices Inc. (AMD), a Core Select and G33 holding, forecasted that the artificial intelligence or AI accelerator market will grow 70% annually over the next four years to over $400 billion in revenues. This was about twice their previous projection8 and drove shares higher by 6.20% for the week.
Broadcom Inc. (AVGO), a Core Select holding, reported earnings that were ahead of expectations. The board increased its dividend by 14%, the thirteenth consecutive year of increases.9 The stock’s yield for this semiconductor designer and manufacturer is 2.22% at the new rate. Shares rose 1.54% for the week.
Lululemon Athletica Inc. (LULU), a G33 holding, reported sales and earnings that beat expectations. Same store sales rose 9% while e-commerce sales rose 19%. Sales in China rose 53%. The board authorized a $1 billion share repurchase program.10 Shares rose 4.94% for the week.
Did you know…
The Hershey’s Ice Cream Company is a completely separate entity from the Hershey Chocolate Company. Both were founded in Lancaster County, PA in the same year by unrelated men named Hershey. Hershey’s Ice Cream Company was founded by Jacob Hershey and four of his brothers and sold to the Holder family in the 1920s. The company was one of the first to offer consumers pre-packaged ice cream pints.
Mariann Montagne, CFA
Portfolio Management Consultant
Sources:
1 JP Morgan Weekly Market Recap 12-8-23
4 CNBC.com
5 Bureau of Labor Statistics 12-5-23
6 Bureau of Labor Statistics 12-8-23
7 All weekly changes in company stock prices: Yahoo Finance
8 AMD Advancing AI Event Keynote Address 12-6-23