The WMA Weekly Market Wrap v. 171212

December 12, 2017

Mostly Higher

Domestic stocks turned positive for the week on Friday after the November jobs report came in much stronger than expected, underlining the economy’s strong fundamentals. Both the Dow and the S&P 500 closed out their third straight weekly advance, while the Nasdaq ended in slightly lower territory for the week, its second consecutive decline.

The U.S. economy created 228,000 jobs in November, above the 200,000 that had been expected, according to the Bureau of Labor Statistics. The unemployment rate held steady at 4.1 percent while wages rose 0.2 percent. The report was the latest indication that the economy is running at close to full tilt, which could lead to the Fed being more aggressive in changing its monetary policy and raising short-term interest rates.

Besides the jobs report, a reading on consumer sentiment fell to a three-month low in December, coming in below analyst expectations. Separately, wholesale inventories fell 0.5 percent in October. Friday also brought the welcome news that both the Senate and House had approved a two-week funding bill late Thursday, staving off a threatened government shutdown this weekend. The bill was signed by President Trump on Friday and buys the GOP a little more time to hammer out a longer-term deal.

In Europe, stocks rallied due to a breakthrough in Brexit divorce talks between the UK and the EU. After days of tense negotiations, Jean-Claude Juncker, president of the European Commission, said on Friday that “sufficient progress” has been made for talks to move on to the second phase, which will cover trade agreements and a potential transition period. The Stoxx Europe 600 logged its highest close since November 9, according to FactSet data. Asian stocks closed firmly in positive territory last week. So did oil, while gold fell again.

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