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 11, 2020. Economic/Market happenings:
Equities were mixed last week, but here in the U.S. we have seen a marked change in the trends— away from the top 5 mega-cap technology stocks, toward the rest of the S&P 500. The top 5 stocks are now down 2.1% since early November, trailing the S&P 500 which has returned 4.4%. Last week, the S&P was down 0.95% while the small and mid-cap Russell 2000 rose 1.03% and the NASDAQ declined 0.69%. International developed markets (MSCI EAFE) declined 0.51% while the emerging markets (MSCI EM) gained 0.54%. In the U.S., the energy and communications sectors were the best performers while real estate and financial were the biggest laggards. (1)
Interest rates fell and prices rose last week on disappointing employment figures (see Economic Data below). The entire yield curve dropped with the 2-year, the 10-year and the 30-year declining by 5, 7 and 10 basis points, respectively. The 10-year closed with a 0.90% annual rate. (2)
The price of gold (GLDM), a Precious Metals strategy and ETF Endowment Series holding, edged up 0.16% last week and is now up 21.00% year-to-date. (3) Demand for this precious metal from overseas central banks has been on the upswing particularly from those countries that have a low ratio of gold to total reserves. (4)
Initial jobless claims surged by 137,000 to 853,000 for the week ended December 5, well ahead of the consensus estimate of 720,000. (5)
The index for consumer sentiment for early December rose to 81.4, the highest since October and well ahead of expectations for a read of 75.5. Both segments, current conditions and expectations, advanced. (6)
Proprietary portfolio happenings:
Abbott Laboratories (ABT), a Core Select holding, raised its dividend by 25%. Abbott has increased its dividend payout for 49 consecutive years. (8) The yield on the new rate is 1.68%.
Broadcom (AVGO), a G50 holding, reported revenue, cash flow and earnings that beat consensus expectations. Management also raised guidance for the current quarter, ahead of the consensus. Additionally, the board boosted their dividend by 11% and shares now yield 3.55%. (9)
Did You Know? Leo Fender, inventor of one of the most popular electric guitar brands in the world, Fender Guitars, never learned how to play the instrument. In addition to that, he actually was an accountant before losing his job in the Great Depression. When he lost his job, he decided to turn his hobby of tinkering with electronics, radios, amplifiers, etc. into a business, “Fender Radio and Record Shop”.
Sources: (1) JP Morgan Weekly Market Recap 12-14-20, (2) US Treasury, (3) Morningstar, (4) World Gold Council 12-3-20, (5) Bureau of Labor Statistics 12-10-20, (6) University of Michigan Consumer Sentiment 12-11-20, (7) All weekly changes in company stock prices: Yahoo Finance, (8) Abbott Laboratories press release 12-11-20, (9) Broadcom press release 12-11-20