Stocks continued their move higher last week. The Dow Jones Industrial Average added 291, or 2.6%, to end at 11,382, the S&P 500 Index gained 35, or 3%, to close at 1225, right near its 2010 high. Many domestic equity indices are hitting recovery highs.
Domestic high yield corporate bonds participated in the gains, tacking on about 0.50% for the week. We believe that high yield bonds continue to offer a great risk-adjusted return in this market environment.
Economic data was mixed last week. Friday’s jobs report showed just 39,000 new workers hired in November, compared to estimates of 144,000. A slight miss; go figure. November retail sales were better than expected, consumer confidence recently ticked up to a five-month high, and vehicle sales exceeded an annualized 12 million each of the past two months. The majority of the population with jobs appears to be more comfortable in spending for the holiday season.
The yield on 10-year Treasuries rose above 3%, the highest since July, while crude oil climbed to a 26-month peak above $89. Gold made a run at its all-time high, closing at $1,416 per ounce.
It appears that we are in a bull market again as the indexes have climbed continuously since August. We could see some sell off in the coming weeks as the increase, at times, appears to be almost euphoric. Any pull packs offer buying opportunities as when the economy is improving, the markets usually increase as well.
For additional information, please contact Richard Taylor.