For the week of Monday, November 28, 2011 through Friday, December 2, 2011:
- Standard & Poor’s 500 Index: 7.39%
- Dow Jones Industrial Average: 7.01%
- NASDAQ Composite: 7.59%
Kicking off the holiday season, the markets rallied following news that Black Friday sales dwarfed expectations. Perhaps this was due to the surge in consumer confidence in November. Along with the ISM Manufacturing Index picking up, the outlook for our economy looks better and better. Despite great news on the home front, the European financial crisis is still trying to weigh down the market. The Europeans have been meeting to discuss many options to stem the crisis, but cannot agree.
In an effort to assist European banks, several central banks from a few nations took action this week. They lowered interest rates on dollar swaps to increase liquidity in Europe, and lower the cost of emergency financing.
In the United States, the unemployment rate fell to 8.6 for November. This should help restore confidence in the economic situation and bolster our recovery.
European Financial Crisis
- Bond yields fell this week as members of the eurozone have been working vigorously to contain the situation.
- The central banks of the United States, Japan, England, Switzerland and Canada lowered the interest rate for dollar exchanges.
- This was to help provide emergency capital and liquidity to European banks.
- European markets rose on the news, and this should give euro members more time to solve the issue.
Jobless Claims
- Initial claims rose to 402,000 from 396,000, an increase of 6,000.
- Claims from two weeks ago were revised higher to 396,000 from 393,000.
- The increase was more than expected, since initial claims have been slowly declining.
- Once again, claims have risen above the 400,000 threshold.
ADP Jobs Report
- Payroll company ADP estimated that private sector hiring rose by 206,000 in November.
- Economic Analysts expected the increase to be closer to 130,000.
- This was the largest monthly gain since December of 2010, and almost double the average gain since May.
- This should help the economy and markets and, hopefully, restore some confidence to the employment situation in the US.
Interest Rates
- Rates rose this week as investors switched investment gears and left treasuries for stocks.
- The two-year Treasury dipped two basis points to 0.25%.
- The five-year Treasury increased four and a half basis points to 0.98%, still below 1%.
- The 10-year Treasury rose seventeen basis points to 2.13%.
- The 30-year Treasury flew 22 basis points to 3.14%; however, it is still rather weak and less than the 3.5% seen late October.
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