By Briefing.com
After Santa Claus:
It was a mixed week for the stock market. Downward momentum from late last week carried into early this week, but the market then stabilized and went into a holding pattern.
Two themes from the past week were good economic data and continued mergers and acquisitions.
On Monday, the S&P 500 lost 7 points. There was no major news to account for the loss, but the tone had worsened late in the prior week. Tuesday, the S&P was down a miniscule 0.30 for its fourth straight loss. That changed on Wednesday, as the S&P gained 3 points and kept up a modest increase through the end of the week.
The news was largely good. Inflation data were particularly comforting. On Tuesday, the core PPI for November was reported to be up just 0.1%. This follows a 0.3% drop and the net change over the past six months is a mere 0.2%. Not much inflation there.
On Thursday, the core Personal Consumption Deflator was released. This is one of the most accurate measures of consumer inflation. It was up just 0.1% for the second straight month after two 0.2% gains. The year-over-year increase is 1.8%. Not much inflation there either.
The economic news was also good. November housing starts showed a surprisingly strong increase. Third quarter real GDP growth was revised slightly lower to 4.1% from 4.3%, but that is still very strong. November durable goods new orders rose a very strong 4.4%, and December consumer confidence was revised higher. New home sales for November plunged 11.3% but that was after an aberrant surge in October.
Overall, the data suggest that GDP growth remains strong and inflation low.
The other theme this week was the continued heavy pace of mergers and acquisitions activity. In particular, private equity firms have been active in making bids for large companies. This week, there were fifteen deals announced. These included FPL Group buying Constellation Energy for $11 billion, Google taking a $1 billion stake in Time Warner's AOL, and General Electric buying Arden Realty for almost $5 billion.
The stock market enters the last trading week of the year with modest upward momentum. The S&P 500 index has averaged a 1.7% gain since 1969 over the last five trading days of the year and the first two of the new year. It will be a very slow week for news, so the focus will be on whether such a "Santa Claus" rally occurs again this year.
Two themes from the past week were good economic data and continued mergers and acquisitions.
On Monday, the S&P 500 lost 7 points. There was no major news to account for the loss, but the tone had worsened late in the prior week. Tuesday, the S&P was down a miniscule 0.30 for its fourth straight loss. That changed on Wednesday, as the S&P gained 3 points and kept up a modest increase through the end of the week.
The news was largely good. Inflation data were particularly comforting. On Tuesday, the core PPI for November was reported to be up just 0.1%. This follows a 0.3% drop and the net change over the past six months is a mere 0.2%. Not much inflation there.
On Thursday, the core Personal Consumption Deflator was released. This is one of the most accurate measures of consumer inflation. It was up just 0.1% for the second straight month after two 0.2% gains. The year-over-year increase is 1.8%. Not much inflation there either.
The economic news was also good. November housing starts showed a surprisingly strong increase. Third quarter real GDP growth was revised slightly lower to 4.1% from 4.3%, but that is still very strong. November durable goods new orders rose a very strong 4.4%, and December consumer confidence was revised higher. New home sales for November plunged 11.3% but that was after an aberrant surge in October.
Overall, the data suggest that GDP growth remains strong and inflation low.
The other theme this week was the continued heavy pace of mergers and acquisitions activity. In particular, private equity firms have been active in making bids for large companies. This week, there were fifteen deals announced. These included FPL Group buying Constellation Energy for $11 billion, Google taking a $1 billion stake in Time Warner's AOL, and General Electric buying Arden Realty for almost $5 billion.
The stock market enters the last trading week of the year with modest upward momentum. The S&P 500 index has averaged a 1.7% gain since 1969 over the last five trading days of the year and the first two of the new year. It will be a very slow week for news, so the focus will be on whether such a "Santa Claus" rally occurs again this year.
Bons negócios.
EnglishMan.
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