Stocks closed higher last week after a two-day rally towards the end of the week. This added to November's gains as the last month of trading for 2023 began. The Dow Jones Industrial Average remained flat with a marginal increase of 0.01%, whereas the Standard & Poor's 500 Index rose by 0.21%. The Nasdaq Composite Index also advanced by 0.69% for the week. Meanwhile, the MSCI EAFE Index, which tracks developed overseas stock markets, was up by 0.37%.
Stocks Extend Gains
The bond and stock markets had a close relationship in November, with stocks rising as bond yields fell. However, this pattern changed last week when stocks fell in the first three days of the week despite declining yields. The reason behind this was a weak job openings report, the ADP employment update, and a substantial productivity revision, which led to a drop in yields.
On Thursday, investor enthusiasm returned after some big news related to Artificial Intelligence (AI). One AI chip manufacturer announced the launch of a new AI chip, and a mega-cap tech company unveiled an enhanced version of its AI model for business use. As a result, the stocks began to rise again.
The upward trend continued on Friday despite rising yields. Investors saw the stronger-than-expected employment report as a sign of a soft landing, which increased the potential for further market growth.
It was reported last week that an upward revision has been made to the annualized productivity growth of the third quarter. The initial report had estimated it to be 4.7%, but it has now been revised to 5.2%. This positive development is expected to help control inflation and boost future corporate profits. This increase in productivity is the fastest since the third quarter of 2020. The report also showed that unit labor costs have fallen at a 1.2% annualized rate, which indicates a decrease in wage-growth inflationary pressures. This is good news as productivity has been increasing for two consecutive quarters, which may allow the Federal Reserve to ease its restrictive monetary policy.
This Week: Key Economic Data
Tuesday: Consumer Price Index (CPI).
Wednesday: Producer Price Index (PPI). FOMC Announcement.
Thursday: Retail Sales. Jobless Claims.
Friday: Industrial Production. Purchasing Managers’ Index (PMI) Composite Flash.
Source: Econoday, December 8, 2023
This Week: Companies Reporting Earnings
Wednesday: Adobe, Inc. (ADBE)
Thursday: Costco Wholesale Corporation (COST)
Friday: Lennar Corporation (LEN)
Source: Zacks, December 8, 2023
Food For Thought
"The whole fun of living is trying to make something better"
– Charles Kettering
Tax Tips for Children or Grandchildren with Part-Time Job
Many of us have kids or grandkids who work part-time. Whether they’re bussing tables, working in a shop, or other jobs, these tips may help them (and you) understand the tax implications of part-time jobs:
Tip adapted from IRS.gov6
Food For Thought
How to Take a Vacation Without Leaving Home
Vacations provide a ton of benefits and are a great way to relax and take a break from your everyday stressors. But sometimes, you can't swing a whole vacation. The good news is that you can still enjoy a little getaway without leaving the comfort of your own home.
Here are some fun ways to "get away" without actually getting away:
Tip adapted from Ideas.ted.com7
Riddle of the Week
My first is twice in apple but not once in tart. My second is in liver but not in heart. My third is in giant and also in ghost. Whole I'm best when I am roast. What am I?
Last week’s riddle: It has no body, but it has a copper head and copper tail. It can be found in the street and in just about any store. What is it? Answer: A penny.
Photo Of The Week
Temple of Kukulkan, Chichen Itza, Yucatan, Mexico
Footnotes and Sources
2. The Wall Street Journal, December 8, 2023
3. The Wall Street Journal, December 8, 2023
4. MarketWatch, December 6, 2023
5. MarketWatch, December 6, 2023
6. IRS.gov, May 1, 2023
7. Ideas.ted.com, October 9, 2023
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Weekly Market Insights: Stocks Spark A Rally
December 13, 2023