by Mariann Montagne, CFA
Posted on December 27, 2023
All data is for the week ended Dec. 22, 2023
Stocks
The S&P 500 rose 0.77% last week, marking eight consecutive weeks of gains. The Russell 2000 increased 2.47%, another push higher for mid- and small-cap stock outperformance as market gains continue to broaden. The Nasdaq added 1.22%. Overseas the developed markets index (MSCI: EAFE) rose 0.84% while the emerging markets index (MSCI: EEM) slid 0.78%. Within the U.S. the best performing sectors were communication services and energy while utilities and technology were the laggards.1
Fixed Income
Interest rates declined again last week, with the benchmark 10-year treasury yield down 1 basis point to 3.90%. The two-year treasury yield dropped 13 basis points to 4.31%.2
Commodities
The price of gold, an Endowment Series and Precious Metals holding, rose 1.79% last week to $2.070.60 per troy ounce. Year to date the price of gold is up 13.22%,3 driven by Federal Reserve rate cuts, rising demand from central banks, and the precious metal’s role as a store of value or “safe haven” during international conflicts and other crises.
Economic Data
A key indicator of inflation, the personal consumption expenditure price index, rose 2.6% in November on a year-over-year basis. This was below estimates and lower than the prior monthly report of 2.9%.4 This is a key indicator that inflation is on its way to meeting the Federal Reserve’s 2% target and supports expectations for interest rate cuts in the new year.
The third and final read of U.S. economic growth for the quarter ended September was revised downward to 4.9% from 5.2% (matching the original estimate). The growth in the third quarter primarily reflected increases in consumer spending and inventory investment.5
Single‐family housing starts in November rose 18.0% from October to an annualized rate of 1.14 million.6 Warmer than normal temperatures likely contributed to the increase along with sliding mortgage rates; the 30-year mortgage rate is down 70 basis points to 6.83% since the end of September.1
Company News7
Apple Inc. (AAPL), a Core Select holding, stopped selling two of its newest Apple Watchesjust prior to Christmasboth in store and onlinedue to an International Trade Commission ruling on a patent infringement lawsuit from Masimo (MASI).8 Apple shares dropped 2.00% for the week.
Nike Inc. (NKE), a G50 holding, reported quarterly earnings that beat expectations. However, management lowered guidance for the coming quarters. They were slightly more cautious on the macro environment including China and the region that includes Europe, the Middle East and Africa.9 Shares were down 11.11% for the week.
Did you know…
The oldest surviving musical composition was a drinking song carved into a Greek headstone between 200 BC and 100 BC. It was a four-verse piece that required a male and female vocalist along with a stringed instrument. The key verse is, “While you live, shine/have no grief at all/life exists only for a short while/and Time demands an end.” You can listen to ithere.
Mariann Montagne, CFA
Portfolio Management Consultant
Sources:
1 JP Morgan Weekly Market Recap 12-26-23
4 Bureau of Economic Analysis 12-22-23
5 Bureau of Economic Analysis 12-21-23
7 All weekly changes in company stock prices: Yahoo Finance