trees and forestThe Markets Move Up and Down, The News Cycle Never Ends

American markets were relatively quiet during Thanksgiving week but there were fireworks in China’s markets.

Late in the week, media outlets reported the China Securities Regulatory Commission was conducting inquiries into several securities firms as part of an anti-corruption crackdown triggered by last summer’s wild market gyrations. The news sizzled through China’s stock markets. The Financial Times wrote:

“It’s like a trip down memory lane… if memory lane was vertical… The Shanghai Composite was down by as much as 6.1 percent in late trade, with the tech-focused Shenzhen Composite following suit, down by as much as 6.8 percent. It would be Shanghai’s biggest one-day fall since August 25, when the benchmark slumped by 7.7 percent, writes Peter Wells in Hong Kong.”

U.S. markets were sanguine, in part, because there was little activity on Friday, according to The Wall Street Journal. It also may have something to do with an upward revision in third quarter’s gross domestic product (GDP), which measures the value of all goods and services produced in the United States. On Tuesday, the U.S. Commerce Department reported GDP increased at an annual rate of 2.1 percent during the third quarter, an improvement over the initial estimate of 1.5 percent.

Next week may be a doozy. The European Central Bank is expected to introduce additional monetary easing measures, while the U.S. Federal Reserve provides additional clues about the timing of its monetary tightening measures, said The Wall Street Journal. We’ll also get news about U.S. home sales, automobile sales, chain store sales, factory orders, and employment. It’s likely to be an interesting week.


Data as of 11/27/15

1-Week

Y-T-D

1-Year

3-Year

5-Year

10-Year

Standard & Poor’s 500 (Domestic Stocks)

0.1%

1.5%

1.1%

14.3%

12.0%

5.2%

Dow Jones Global ex-U.S.

-0.8

-4.7

-7.9

2.2

0.8

1.3

10-year Treasury Note (Yield Only)

2.2

NA

2.2

1.7

2.8

4.4

Gold (per ounce)

-2.3

-11.8

-11.5

-15.4

-4.9

7.9

Bloomberg Commodity Index

-0.4

-22.3

-28.2

-17.4

-11.2

-6.8

DJ Equity All REIT Total Return Index

0.9

2.2

3.5

12.0

12.4

7.3

S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

*The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.  You cannot invest directly in this index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.

* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* “Markets Move Up and Down”

Sources:

http://money.cnn.com/2015/11/27/investing/china-markets-brokerage-investigation/

http://www.ft.com/intl/fastft/432211/chinese-stocks-dive-5-afternoon-trade

http://www.wsj.com/articles/global-stocks-fall-as-china-halts-europes-rally-1448615945

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

http://www.barrons.com/mdc/public/page/9_3063-economicCalendar.html

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