Weekly Market Commentary, December 4, 2018

December 4, 2018  | By Robare & Jones

The Markets

Last week provided investors clarity on their two biggest concerns: interest rates and trade. Federal Reserve communication indicated rate increases will likely slow in 2019, and, over the weekend, the United States and China announced an agreement to delay an increase in tariffs from 10 percent to 25 percent on a wide range of U.S. goods. In exchange, the Chinese will buy more U.S. goods, and both sides will seek an agreement in the next quarter.

Markets reacted very positively to the news on rates. The S&P soared 4.8 percent. The gains marked the second time this quarter the S&P 500 has neared a 10 percent fall and rallied back. The MSCI ACWI gained 3.3 percent as global stocks joined the rally. The Bloomberg BarCap Aggregate Bond Index edged up 0.1 percent.

Despite the volatility, November’s returns were positive as the strong performance last week pushed stock indexes from negative to positive returns. The S&P rose 1.8 percent, and the MSCI ACWI climbed 1.3 percent. The Aggregate Bond Index rallied 0.6 percent as concerns about slowing economic growth aided bonds.

 

Data as of 11/30/2018 1-week YTD 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 4.9% 3.2% 4.3% 9.9% 8.9% 13.0%
Dow Jones Global ex-U.S. 1.5 -12.3 -10.3 2.8 -0.1 5.9
10-year Treasury Note (Yield Only) 3.0 NA 2.4 2.2 2.8 2.7
Gold (per ounce) -0.5 -6.1 -4.9 4.7 -0.2 4.6
Bloomberg Commodity Index 1.3 -6.4 -3.7 0.6 -7.8 -3.5
DJ Equity All REIT Total Return Index 2.6 4.1 3.8 7.7 10.4 17.6

S&P 500, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Download Market Data Table

 

Honoring President George W.H. Bush

A note that George H. W. Bush penned to a young naval aviator in August may well have captured the essence of the late president, Vice President Mike Pence told the nation Monday at a Capitol Hill ceremony honoring Bush.

The note was sent to Pence’s son after Michael Pence, a 1st lieutenant in the Marines, made his first tailhook landing on an aircraft carrier named after Bush.

Pence had asked Bush if he would sign a picture of the flight deck. Although Bush’s autographing days were over, the former naval aviator sent the photo along with a note.

“Though we have not met, I share the pride your father has for you during this momentous occasion,” Bush wrote. “And I wish you many CAVU days ahead.”

The acronym stands for Ceiling and Visibility Unlimited, a phrase used by Navy pilots to describe the weather they want when flying off of an aircraft carrier.

But CAVU, Bush once told his children, could also describe his own life. And, Pence said, it may have been the vision he had for his children, his children’s children and his country.

“No barriers. No boundaries. No limits,” Pence said.

Pence spoke as the 41st president lay in a flag-draped casket inside the Capitol dome where he will lie in state until Wednesday.

 

Fun Story

Customers were mistakenly given $100 bills instead of $20s from ATM
Christmas came early for some Bank of America customers in Texas last week when an ATM started spitting out $100 bills instead of $20s. After news spread, a long line formed of people seeking a quick 500 percent return. Apparently caught up in the spirit of cheer, Bank of America said customers could keep the money because it was the company’s error.