Nonetheless, two of the major domestic markets hit new record highs on Thursday and ended the week with sizable gains. The S&P 500 added 1.53% and the Dow gained 2.86%. Meanwhile, the NASDAQ lost 0.60% and international stocks in the MSCI EAFE gave back 0.95%.
What drove markets last week?
Politics played a large role in market performance last week with big developments on tax reform and the Russia investigation.
- Tax Reform
On Thursday, news that the Senate bill was more likely to pass contributed to the Dow and S&P 500 closing at record highs. Early Saturday morning, the Senate did end up voting in favor of the proposal.
- Russia Investigation
On Friday, stocks dropped on news that former National Security Adviser Michael Flynn pleaded guilty to charges of lying to the FBI.
While politics grabbed many of the headlines, we also received economic updates that are worth noting:
- Gross Domestic Product
We received the 2nd GDP reading for July – October, and the report came back higher than expected. During the 3rd quarter, the economy grew at 3.3%, which is its quickest pace in 3 years.
- Housing Sales
New home sales beat expectations in the most recent report and increased 18.7% year over year. The sales were higher than they’ve been in a decade.
- Consumer Spending
Americans spent and earned more money in October, according to the data we received last week.
What should you focus on?
Political developments are affecting daily market performance, so we understand the interest they hold. While you may be following these reports, we also want to ensure you recognize the economic data coming forward, too.
We cannot predict what will happen with tax reform or the Russia investigation. However, we can continue to monitor them while focusing on what’s really happening in the economy beyond the headlines. If you ever have questions about how current events may affect your financial life, please contact us any time.
Monday: Factory Orders
Tuesday: ISM Non-Mfg Index
Wednesday: ADP Employment Report
Thursday: Jobless Claims
Friday: Consumer Sentiment
S&P 500 Index is an unmanaged group of securities considered to be representative of the stock market in general. You cannot directly invest in the index. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Diversification does not guarantee profit nor is it guaranteed to protect assets. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. You cannot invest directly in an index. Consult your financial professional before making any investment decision. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Drake & Associates does not offer tax or legal advice.