The Bottom Line
● The S&P 500 Index was down 4 of the 5 days during the week as optimism for additional fiscal stimulus began to fade. The House and Senate did pass a one‐week federal spending extension to avoid a shutdown through Dec. 18 to buy more time for a stimulus agreement.
● The yield on the US 10‐year Treasury note eased to 0.89%from 0.95% a week ago, reversing a chunk of last week’s 13 basis point increase. Bonds were among the few positive performers for the week.
● After all the market’s record highs lately, as well as all‐time highs for home prices, it’s not much of a surprise to see U.S. household net worth also hit a record.
Markets snap weekly winning streak
U.S. stocks couldn’t keep up their winning ways, at least not the large caps. The S&P 500 Index set its 30th record high of the year on Tuesday, but that was its only day up during the week as fell ‐1%. The Dow and Nasdaq also dropped. An unexpected jump in weekly unemployment claims, a record daily increase of COVID‐19 deaths, and the failure of lawmakers to negotiate an additional COVID aid package all conspired to dampen investor optimism. The Senate did manage to avert a government shutdown by passing a one‐week federal spending bill. A few areas of the market that had underperformed much of the year have outperformed lately. The Russell 2000 Index of small capitalization stocks was able to extend its weekly winning streak to six weeks and has gained +5% in December. The energy sector was the best performing sector this week, up +1.1%, and the best performing in December so far, up +11.6% ‐‐ the next best sector, Communication Services, is up only +2.7% for the month. It was a big week for initial public offerings (IPOs), as DoorDash and Airbnb made their trading debuts, with first‐day gains of +86% and +113%, respectively.
Digits & Did You Knows
SHARES SUSPENDED ‐ On Dec. 11, 1941, after the U.S. had declared war, the New York Stock Exchange suspended trading in all “enemy securities,” including 36 from Germany, 10 from Japan, 9 from Italy, 6 from Austria, 5 from Hungary and 1 from Bulgaria (source: The Wall Street Journal).
START SAVING ‐ A child born in 2020 would start college in 2038. If that child attended an average public in‐state 4‐year college and if the annual price increases for public colleges that have occurred over the last 30 years (+5.0% per year) continued, the total 4‐year cost for the college education (including tuition, fees, room & board) would be $231,779 or$57,945 per year (source: College Board, BTN Research).
Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid‐CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4%Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.
Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a
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(“PCWM”) and Qualified Plan Advisors (“QPA”).
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