Hello and welcome to this week’s Jones Financial Blog! Our goal at Jones & Associates is to help keep you up to date with interesting current economic/market happenings as well as some proprietary portfolio happenings. Knowledge is power and thought we would share some of ours with you. Enjoy!
All data is for the week ended December 27, 2019.
Equities were generally stronger last week with the S&P 500 up 0.60%, the Russell 2000 down 0.15% and the NASDAQ rising 0.92%. Overseas the developed markets (MSCI EAFE) rose 0.77% while the emerging markets (MSCI EM) gained 1.21%. Volume in the S&P was very light due to the holidays, and the best performing sectors were consumer discretionary and technology while communication services and utilities lagged the averages. At the current pace the S&P is likely to be up at least 29% for the year – the best gain since 1997 – led by large cap and mid-cap growth stocks. (1)
Interest rates declined and values rose last week, with the benchmark 10-year US treasuries ending the week with a 1.88% yield, down 4 basis points. (1)
Gold (GLDM), an Endowment Series and Precious Metals strategy holding, prices added 2.24% to close at $1,512 an ounce, a six-week high, as the dollar index eased slightly while investors remained cautious about the phase one trade deal between the US and China. The precious metal is up 17.55% year to date and on track for its best year since 2010 supported by easing monetary policy from major central banks and increased purchases from central banks. Historically, Gold reached an all-time high of $1,920.30 in September of 2011.
Durable goods new orders for November decreased 2%, below expectations and following a 0.2% gain in October. Shipments increased 0.1% for the month and were flat for the two months together. (4)
Sales of new single-family homes rose 16.9% year over year in November, with an average selling price of $388,200 – a 7.2% gain year over year. New homes available for sale have 5.4 months of supply at the current sales rate. (5) Note that new home sales account for about 12% of total housing market sales.
Proprietary portfolio happenings:
Boeing (BA), a G50 and Core Select holding, the chief executive officer was ousted by the board of directors. Their chief financial officer will serve as CEO until mid-January at which point the chairman will take over as CEO and president. The stock was initially up on the news but closed nearly flat for the week.
Did You Know? Watching the Times Square Ball drop on New Year’s Eve, you’re witnessing “time ball” timekeeping, a practice that began 180 years ago on the English coast when large metal or wooden balls would plummet to synchronize navigators’ marine chronometers. Technology has made them nearly obsolete. The Times Square version is just a novelty—no one actually starts their midnight clock by it. The time ball at the Royal Observatory Greenwich in London still falls each day at 1 p.m.
Sources: (1) JP Morgan Weekly Market Recap 12-30-19, (2) Morningstar.com, (3) Trading Economics, (4) US Census Bureau 12-23-19, (5) US Census Bureau and the Department of Housing and Urban Development 12-23-19, (6) Boeing press release 12-23-19