Investment Commentary – December 29th, 2015
Market Indices as of Market Close December 29th, 2015
Dow 17,721 (-0.57% YTD)
S&P 2,078 (0.95% YTD)
NASDAQ 5,108 (7.85% YTD)
Global Dow 2,369 (2,203 52 week low /2,644 high 2.50)
10-year Treasury 2.31 (1.64 52 week low /high )
Gold 1,067 ($1,045 52 week low /high $1,306)
Oil $37.85 ($35.35 52 week low $/high $65.50)

U.S. holiday retail sales grow a ‘solid’ 7.9 percent: MasterCard/Gas price Dividend?

Strong online sales and demand for furniture and women’s apparel helped U.S. retail sales grow by a “solid” 7.9 percent this holiday season, according to MasterCard Advisors SpendingPulse.

U.S. retail sales, excluding automobiles and gas, had grown 5.5 percent in the period between Black Friday and Christmas Eve last year.

Online sales grew 20 percent in the holiday season this year, MasterCard Advisors, which tracks customer spending, said in a report on Monday. “The double-digit growth in furniture sales … shows that consumers are willing and able to splurge on big ticket items,” Sarah Quinlan, senior vice president of Market Insights at MasterCard Advisors, said in the report.

A delay in the onset of cold weather pushed back apparel buying this fall, so there was pent up demand that played out after Black Friday, she said.

Quinlan said consumers were spending the money they were saving from lower gas prices.

When do markets around the world close on New Year’s Eve?

Normal day for U.S. stock markets; in Europe, France and Germany are closed

Virtually all major markets around the world will be closed on New Year’s Day, but U.S. stock traders can forget about strapping on the party hats and starting their New Year’s Eve party during the early afternoon.

Both the New York Stock Exchange and Nasdaq will observe regular trading hours on Thursday, Dec. 31, closing at 4 p.m. Eastern. They will be closed on Friday, Jan. 1, and regular trade will resume on Monday, Jan. 4.

Bond traders, however, can pop an early afternoon cork. The Securities Industry and Financial Markets Association has recommended that the bond market close at 2 p.m. Eastern. They, too, will be closed on New Year’s Day.

Thought of the week

Fears of a fiscal cliff arose once again this year, as legislators repeatedly failed to pass a budget. However, a combination of willingness to compromise on taxes, removal of certain policy riders, and the
resignation of Speaker Boehner seemed to bring the parties together and an omnibus spending package passed late this month. This bill contains several positive measures for the U.S. economy and puts fiscal policy in a position to ease as monetary policy tightens. Domestic spending has been lifted above the sequester caps. A deal on corporate taxes was reached so that companies can plan their research and
development activities instead of wondering if they will retroactively receive tax incentives. Most importantly for investors, the omnibus spending package suspends the debt ceiling until early 2017, sparing markets from the turmoil of a debt ceiling fight for at least a year. A multi-year transportation bill was also approved in December for the first time in years, enabling repairs to begin on America’s
crumbling infrastructure. All in, these measures will provide a boost to aggregate demand, as can be seen in the Chart of the Week. Because of these measures, the budget deficit will increase to 3.0% of GDP, higher than the previously estimated 2.2%, making fiscal policy simulative for the first time in seven years.

1954: A quarter-century after it hit the 300 mark, the Dow Jones Industrial Average finally closes above 400 for the first time, finishing the day at 401.97.

Happy New Year from your friends at Affinity Asset Management!

The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.

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