Statistic of the Week:
Data breaches are becoming increasingly common, and a significant threat to S&P 500 companies. In 2007, only 21 companies cited the threat of data breach as a concern in their annual report. Today that figure has increased to 204. We have to wonder what the hold up is for the other 296 firms.
While it’s no secret that Brexit is happening, some of the first physical signs are starting to show. The European Banking Authority, the agency that runs the much discussed “stress tests” on financial firms in the EU, is moving from London to Paris. At the same time, the European Medicines Agency will be leaving London for Amsterdam.
Market Moving Events:
Monday: New Home Sales Tuesday: International Trade, Consumer Confidence Wednesday: GDP, Pending Home Sales Thursday: Jobless Claims, Personal Income and Outlays, Chicago PMI Friday: Vehicle Sales, ISM Manufacturing Index, Construction Spending
In a shortened holiday week, US equity markets continued their upward march. The DJIA rose 0.86%,1 as the S&P 500 notched a gain of 0.91%2 and the NASDAQ put in a notable move of 1.57%.3 Both the NASDAQ and the S&P 500 closed at record highs.4 While the NASDAQ is in record territory in nominal terms, the record it set on March 10, 2000, when adjusted for inflation, would still be about 5% higher than Friday’s close.5 This should serve as a helpful reminder to index investors that believe in “set it and forget it.” Seventeen years is a long time to be waiting to break even. While Americans were celebrating Thanksgiving and US markets were closed, the Chinese Shanghai composite fell 2.3%, its largest decline since 2016.6 The “shadow banking” system in the country had been allowed to grow through the National Congress.7 With the major political event that happens once every five years behind us, we would not be surprised to see the central government reigning in the shrouded system – this could spell more volatility. In the week ahead, markets in the US will likely be focused on the strength of US retail sales for the holiday shopping season. The quality of those figures will shape the likelihood of a “Santa Claus rally” as we head into year end. In years past when the market has registered gains similar to this year’s, the market finished higher 80% of the time, with an additional gain averaging 2.5%.8 - Dan McElwee, CFP®
Chart of the Week: