Pax

Pax. Stocks posted a mixed close in a thinly traded and peaceful session on Christmas Eve day. The holiday spirit continues to keep the sellers at bay.

N O T E W O R T H Y

Simple and sweet.  Stocks have had an awesome year.  Remember last December 24th?  The Dow Jones Industrial Average fell -653 points or -2.9%… need I remind you any further?  Since last Christmas Eve, the S&P500 climbed by +37.1%.  It wasn’t just stocks.  Bonds went up by +8.9%, gold traded up by +19.3%, and crude oil advanced by +34.01%.   What makes these rallies rather interesting is that those asset classes are typically not correlated.  When stocks go up, bonds typically go down and gold typically only rallies when stocks go down.  Sure, things are a little different than they were in the past, but this was truly a unique year.  One factor is that the Fed, the President, and corporate CEO’s are in touch with the world quite frequently (some times too much so).  The Fed has had a big hand in keeping the wind at the back of the market despite every attempt of the Administration to tamp down growth with the trade war.  Negative interest rates all over the world have increased demand for US government and corporate bonds.  The gnawing fear of a reemergence of trade war hostility has increased the demand for risk-buffering gold. Though OPEC is losing its grip on global crude supply, the cartel’s aggressive supply cuts along with sanctions have helped crude climb in the past twelve months. So here we are, a whole year later of that fateful day.  Lots to be thankful for, if you are an investor, which is probably why sentiment remains high going into the final days of 2019.  There will certainly be a lot of reflecting in the days ahead… only four more sessions in the US before we ring in the New Year.

THE MARKETS

Stocks closed mixed on thin holiday trading, ignoring an unexpectedly weak Richmond Manufacturing Index (-5, est. +1). The S&P500 dropped by -0.2%, the Dow Jones Industrial Average slipped by -0.13%, the Russell 2000 climbed by +0.23%, and the NASDAQ Composite Index advanced by +0.08%.  Bonds climbed and 10-year treasury yields dropped by -3 basis points to 1.89%.

NXT UP

- Initial Jobless Claims is expected to show +220k new filings versus last week's 234k.

- UK and Canadian markets are closed for Boxing Day and Germany is closed for the Christmas Holiday.

daily chartbook 2019-12-25