Stock indices rose this week as the first vaccine rolls out and Congress appears to narrow in on a Covid relief/stimulus bill. The small company Russell 2000 index had the biggest gains. The gains came despite an uptick in unemployment claims.
The Federal Reserve met and updated their plans as follows:
- Instead of bond purchases for “the coming months” they announced that bond purchases will continue “until substantial further progress has been made toward” meeting its employment and inflation goals.
- The FED also extended its outlook near zero interest rates to at least through 2023.
Treasury yields rose with the 30-year bond yield closing at 1.693% and the 10-Year note at 0.949%. Crude oil rose to $49.05 a barrel while natural gas rose to $2.703 per MMBTUs. The U.S. dollar index fell to 89.95 and gold prices rose to $1886.20 an ounce.
In the economic numbers this week:
- The European Union approved a $2.2TN stimulus deal funded by joint debt.
- The Federal Reserve reported that U.S. Industrial Production rose 1.4% in November. This follows a 0.9% rise in October but still remains 5% below February levels.
- Manufacturing Output rose 0.8% in November.
- Mining, including oil and gas production rose 2.3% in November.
- Utilities rose 4.3% in November.
- The Commerce Department reported that retail sales fell 1.1% in November following new pandemic restrictions. However, retail sales were still 3.6% higher in November than in February.
- Vehicle sales fell 1.7%.
- Electronics fell 3.5%
- Clothing fell 6.8%
- Restaurants fell 4.%.
- The Labor Department reported:
- A seasonally adjusted 885,000 workers filed initial claims for unemployment in the week ending December 12th. This was up 23,000 from a revised 862,000 the week before as virus shutdowns accelerated.
- The four week moving average of initial claims, designed to smooth out weekly volatility, rose 34,250 to 778,250.
- Continuing claims for regular unemployment fell from 5.8MM to 5.5MM in the week ending December 5th.
- A broader measure of claims including extended benefits, pandemic assistance and other programs rose from 19.0MM to 20.6MM as of November 28th.
- For the full report go here: https://www.dol.gov/ui/data.pdf .
- The EIA weekly oil report is here: http://ir.eia.gov/wpsr/wpsrsummary.pdf . Also, the EIA reported in the past week:
- Field production of crude oil was fell from 11.1MM barrels per day to 11.0MM barrels per day.
- Natural gas storage fell 122BN cubic feet and is above the average level at this time of year during the past five years.
- Baker Hughes reported the number of active oil rigs rose 5 to 263. The number of active natural gas rigs rose 2 to 81.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF®, MA Erik A Smith AIF®
President Managing Partner
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. The Indices mentioned are unmanaged and cannot be invested into directly.