Major market indices closed the holiday-shortened week with modest gains, while small-cap stocks lagged, sending the Russell 2000 lower.

Economic data drove much of the week’s trading. A delayed report on third-quarter gross domestic product surprised to the upside, showing growth well above expectations. However, inflation remains a concern, as the PCE price indices continue to run above the Federal Reserve’s target.

The stronger GDP reading was fueled primarily by resilient consumer spending and a surge in fuel exports, highlighting ongoing economic momentum even as policymakers remain focused on inflation risks.

Market & Rate Highlights

Treasury Yields (Higher on the Week)

• 30-year: 4.816% (higher)
• 10-year: down to 4.133% (lower)

Mortgage Rates

• Average 30-year (Freddie Mac): 6.18% (lower)

Commodities & Currency

• Crude oil: $56.88 per barrel (higher)
• Natural gas: $4.391 (higher)
• U.S. dollar index: 98.02 (lower)
• Gold: $4,559.50 per ounce (higher)

Federal Reserve

• Industrial production rose 0.2% in November.
  • Manufacturing unchanged and +2.5%, year over year.
  • Mining, including oil and gas production +1.7% and +3.9% YOY.
  • Utilities –0.4% and +4.8% YOY.

Commerce Department (delayed report)

• Real gross domestic product (GPD) rose at an annual rate of 4.3% in the third quarter driven largely by consumer spending.
• The price index for gross domestic purchases rose at a 3.4% annual rate in the third quarter.

• Durable goods orders (seasonally adjusted) fell 2.2% in October.

• Personal Consumption Expenditures (September, delayed seasonally adjusted)
  • +0.4% and +0.1% adjusted for inflation.
    • Personal income +0.4% and +0.1% real.
    • PCE price index.
      • +0.3% in September and + 2.8% from last September. 
      • Excluding volatile food and energy, +0.2% and +2.8% year over year.  This is the FED’s preferred measure of inflation and was down from August’s 2.9%.

Labor Department

Jobless Claims (Week Ending Dec 20th)

• Initial claims: 214,000 (-10,000)
• Four-week average: 216,750 (-750)
• Total unemployed: 1,923,000 (+38,000)

Energy & Industry Data

Baker Hughes Rig Count

• Oil rigs: +3 to 406
• Gas rigs: Unchanged at 127

If you have questions about the markets or your financial plan, we’re always here to help.

Loren Rex – Emeritus

Erik A Smith, AIF® – President & C.E.O.

Nicholas Acri, CFP® – Partner & Wealth Advisor

Dylan Thomas, CFP® – Partner & Wealth Advisor

Jack Zeeb – Wealth Advisor

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. The Indices mentioned are unmanaged and cannot be invested into directly. The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange (more than 2500 stocks).

Sources:

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W

https://ir.eia.gov/ngs/ngs.html

https://www.freddiemac.com/pmms

https://www.wsj.com/market-data?mod=nav_top_subsection

https://bakerhughesrigcount.gcs-web.com/na-rig-count

https://www.census.gov/economic-indicators

https://www.bea.gov/data/gdp/gross-domestic-product

https://www.federalreserve.gov/releases/g17/current/default.htm