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Weekly Market Update for December 28, 2018

by JM Hanley

The Dow was down on Friday, falling 76 points to close at 23,062. For the week, the Dow was up 2.7% (SP500 +2.9%) and year-to-date is now down 6.7% (SP500 -7.0%). The yield on the 10-year Treasury fell seven basis points, closing at 2.72%.

Bargain hunters lifted the major indexes into positive territory after they lurched downwards last week. Wild swings masked a sleepy Christmas market. Trading was slow, so institutions selling to establish a tax loss and pension fund managers getting portfolio allocation in order swung the market back and forth.

The market’s difficulties seem to be weighing upon the formerly buoyant confidence of the US consumer, which has reached a five-month low. Encouragingly, however, respondents have gotten more optimistic about the job market. The housing market is mixed. Pending home sales fell last month, though prices are still on the rise. The Richmond Fed’s survey of manufacturers was unexpectedly ugly; shipments and new orders both fell. Its survey of the service industry was more positive.

The price of crude oil remained roughly flat this week as US crude stockpiles showed a smaller-than-expected draw – of 0.1m barrels – while product inventories of gasoline rose (+3.0m bls) and diesel was unchanged.

Monday (when the market will close at noon) will mark the final day of the fourth quarter. The first partial week of the New Year will bring a new home sales report on 1/2, the December readout for the ISM manufacturing index (1/3), and the December jobs report (1/4). The market, and our office, will be closed Tuesday in observance of New Year’s Day.

*The information contained in this commentary is not investment advice for any person. It is presented only for informational purposes to assist in explaining factors that may have had an impact in the past or may have an impact in the future on client portfolios or composites. All expressions of opinion reflect the judgment of the firm on this date and are subject to change. Included information has been obtained from sources considered reliable, but we do not guarantee that the foregoing materials are accurate or complete. Clients or prospective clients should contact Ulland Investment Advisors for individualized information prior to deciding to participate in any portfolio or making any investment decision. Ulland Investment Advisors does not provide tax advice. All clients are strongly urged to consult with their tax advisors regarding any potential investment. Past performance does not guarantee future results; there is always a possibility of loss.

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Ulland Investment Advisors

4550 IDS Center · Eighty South Eighth Street · Minneapolis MN 55402 · Telephone: 612-312-1400 · Facsimile: 612-204-3464