US Stocks ended the week slightly lower after rallying on Tuesday and Wednesday. Traders seemed relieved that the uncertainty of the Federal Reserve’s first rate hike had been resolved but markets sold off on Thursday and Friday due to weak energy and commodity prices. Friday’s selloff was partly due to the “quadruple witching” which is the traders cute term for the quarterly expiration of stock and index options and stock and index futures. Foreign stocks performed better than US Stocks. Treasury yields and the dollar rose on the Fed’s rate increase and commodities fell.
There is one thing I need to point out to those that closely watch the value of mutual funds in their accounts. This is the time of the year where mutual funds typically payout capital gains distributions. When the funds trade ex-dividend the price drops dramatically but if you are reinvesting the dividends the total value will reflect this reinvestment one to three business days later. I mention this so people aren’t alarmed by the drop in price associated with a fund going ex-dividend.
In economic news this week:
- The Commerce Department reported that US housing starts rose a seasonally adjusted 10.5% in November. Keep in mind that this follows a 12% decline in October. From a year earlier housing starts were up 16.5% in November. Single family housing starts rose 7.6% and multifamily housing starts rose 30.8%. Also, the level of housing starts is still historically low with shortages of skilled trades and land cited as holding back home construction.
- The Federal Reserve Reported that US Industrial Production fell 0.6% in November, the third month in a row. Capacity utilization also fell from 77.5% to 77%. Both numbers came in weaker than expected. The decline was attributed solely to the mining sector which includes energy production. Manufacturing was unchanged.
- The Labor Department reported that first time claims for unemployment fell 11,000 in the prior week. The four week moving average of claims fell 250 to 270,500.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF® Erik Smith
Generations Financial Planning & Wealth Management 269-441-4143
77 E. Michigan Ave, Suite 140
Battle Creek, MI 49017
Carrie Fuce, Assistant 269-441-4091
Toll Free: 800-513-8180
Visit our Website: www.genfinplan.com
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.