Investor optimism and fears of missing out on future gains propelled stocks higher in the last full week of trading before year-end.
The Dow Jones Industrial Average added 0.22%, while the Standard & Poor’s 500 gained 0.75%. The Nasdaq Composite index advanced 1.21% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, added 0.51%.1,2,3
Stocks Build on Gains
The current market narrative of declining inflation, easing interest rates, and better earnings ahead continued to fuel stock market gains, with some of the year’s laggards, such as smaller cap stocks and energy names, leading the way.
While the stock market has repeatedly seen gains gather steam in the final trading hours, a late-day sell-off on Wednesday unnerved investors. While it’s difficult to know precisely why, the sharp decline may have resulted from profit-taking and low trading volumes, which can result in unexpected volatility or other technical reasons. Whatever the case, stocks rebounded nicely the following day and Friday.
The housing market struggled this year amid higher mortgage rates and rising home prices. Last week, several housing reports suggested the housing market may be improving.
New home construction rose 14.8% in November, reaching levels not seen since May, while existing home sales rebounded 0.8%, reversing five straight months of declines. Existing home sales have been hurt by low inventory since many homeowners with low-rate mortgages are hesitant to move and take on a higher-rate mortgage. This logjam may loosen as 30-year mortgage rates fell from 7.79% at the end of October to 6.95% in mid-November.4, 5
New home sales disappointed, however, falling 12.2%, though they came in 1.4% higher from November a year ago.6
This Week: Key Economic Data
Thursday: Jobless Claims.
Source: Econoday, December 22, 2023
This Week: Companies Reporting Earnings
No companies reporting earnings this week.
Source: Zacks, December 22, 2023
Tax Tips for Those in the Military
The Internal Revenue Service has certain special tax breaks and programs for members of the U.S. Armed Forces.
*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov7
Stay Healthy During Flu Season
This flu season, it’s more important than ever to stay healthy. Fortunately, you may reduce your risk this flu season with a few simple steps.
While this information should not substitute for medical advice from your healthcare provider, implementing better habits, like frequent handwashing, wearing a face mask, and avoiding anyone ill, may help you and your loved ones stay healthy this flu season.
Tip adapted from The Centers for Disease Control8
"The information contained above is illustrative, provided for educational and informational purposes only, does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor."
Footnotes and Sources
2. The Wall Street Journal, December 22, 2023
3. The Wall Street Journal, December 22, 2023
4. MarketWatch, December 19, 2023
5. Fox Business, December 20, 2023
6. U.S. Census Bureau, December 22, 2023.
7. IRS.gov, October 23, 2023
8. CDC.gov, December 11, 2023
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