Week Ended November 2, 2012
Shortened trading week leaves stocks
mixed
Stocks ended mixed after an unusually
abbreviated trading week. Because of Hurricane Sandy, trading was suspended on
Monday and Tuesday, the first two-day shutdown due to the weather since the
Blizzard of 1888. Initially, exchange officials suggested that trading could
still take place electronically despite the situation in lower Manhattan, but
worries over recoding systems to bypass the floor exchange eventually led them
to close entirely.
Markets reopen in orderly manner
Because the market's closure occurred in
the midst of the third-quarter earnings season, some companies delayed
reporting while markets were closed, and many observers anticipated a volatile
start to trading when markets reopened Wednesday. In the event, stock prices
were relatively stable and trading volumes were only slightly below normal
despite the difficulties many traders faced getting to work.
Economic data boosts stocks
The storm did not delay the release of
important labor market data on Thursday and Friday. The major indexes jumped on
Thursday, following a report from private payrolls processing firm ADP, which
showed a solid increase in hiring in October. Investors were further encouraged
by a report showing that consumer confidence had reached its highest level in
four years, thanks in part to the improved labor market.
Markets finish on down note despite good
jobs data
The positive response to Thursday's data
might have siphoned some of the optimism from Friday's official jobs report,
which confirmed that employers were adding to payrolls at a healthy clip.
T. Rowe Price economists note that the job gains were the broadest
they have been in several months, with retailers, professional services firms,
manufacturers, and homebuilders, among others, all adding jobs.
Friday's pullback may have also reflected
the uncertain political environment. Many investors may have been reluctant to
sponsor further gains ahead of the upcoming presidential election, which should
cast some light on the future direction of fiscal policy.
|
U.S. Stocks1 |
|||
|
Index2 |
Friday's Close |
Week's Change |
% Change |
|
DJIA |
13093.16 |
-14.05 |
7.17% |
|
S&P 500 |
1414.20 |
2.26 |
12.45% |
|
NASDAQ Composite |
2982.13 |
-5.82 |
14.47% |
|
S&P MidCap 400 |
988.48 |
13.56 |
12.40% |
|
Russell 2000 |
815.45 |
2.44 |
10.09% |
This chart is for
illustrative purposes only and does not represent the performance of any
specific security. Past performance cannot guarantee future results.
1Source of data Reuters, obtained through Yahoo! Finance Closing
data as of 4 p.m. ET.
2The Dow Jones Industrial Average and the Standard & Poor's 500
Stock Index of blue chip stocks, the Standard & Poor's MidCap 400 Index,
and the Russell 2000 Index are unmanaged indexes representing various segments
by market capitalization of the U.S. equity markets. The Nasdaq Composite is an
unmanaged index representing the companies traded on the Nasdaq stock market
and the National Market System.
___________
Week Ended November 2, 2012
Super-storm Sandy slows trading for the
week
Amid market shutdowns and intensifying
speculation about next week's election, the Treasury market traded in a narrow
range for much of the week. Yields moved higher on Friday following
better-than-expected new job creation. Issuance and trading was muted across
higher-yielding bonds given storm-related staffing issues and hesitation by
many investors to assume additional risk, although activity increased as the
week progressed. The high yield market also slowed following the storm, but
there seems to be a fair amount of pent-up issuance coming to the market next
week. There is still substantial demand for new bonds, particularly higher
quality. Secondary market trading was very slow as most New York City brokerage
firms were short-staffed because of the storm. Most municipal issuance
scheduled for this week will be rescheduled for next week in the wake of the
storm. Bonds that did come to market this week were well received, and demand remains
strong. Tax-free bonds performed well despite a slightly struggling
Treasury market.
Emerging market bonds also affected
Activity in emerging markets bonds was
considerably quieter with the closure of U.S. markets early in the week.
Argentina was under continued pressure following a U.S. appeals court decision
that may potentially impede Argentina from making payments on its U.S.
dollar-denominated external debt. However, improved manufacturing data out of
China did provide some degree of support as they indicate that the world's
largest emerging market economy may have reached a bottom in its
economic slowdown.
Economy grows slowly with manufacturing
sluggish but jobs outlook improving
The U.S. economy continues to grow at
close to a 2% annual pace, although it could slow in the fourth quarter because
of the devastation caused by the storm, according to some analysts. The
manufacturing sector has been stabilizing at a low growth rate, with gains in
new orders offsetting declines in exports, supplier delivery times, and
inventories. On a positive note, the Labor Department reported that private
employers added 171,000 new jobs in October—although the unemployment
rate rose from 7.8% to 7.9% due to more people entering the labor market. In
addition, applications for unemployment benefits declined, reinforcing the data
suggesting that employers are beginning to hire again. Personal income and
spending are both up modestly, although not enough to suggest sustainable
economic growth in the coming months.
|
U.S. Treasury Yields1 |
||
|
Maturity |
November 2, 2012 |
October 26, 2012 |
|
2-Year |
0.28% |
0.30% |
|
10-Year |
1.71% |
1.74% |
|
30-Year |
2.90% |
2.90% |
This table is for illustrative purposes
only. Past performance cannot guarantee future results.
1Source of data: Bloomberg.com, as of 4 p.m. ET
Friday, November 2, 2012.
___________
Week Ended October 26, 2012
International Stocks
Foreign
stock markets closed lower for the week ending October 26, 2012 with the broad
international measure, the MSCI EAFE Index (Europe, Australasia, and Far East),
losing -1.87%.
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
EAFE |
-1.87% |
11.43% |
|
Europe ex-U.K. |
-2.56% |
14.50% |
|
Denmark |
-3.54% |
28.43% |
|
France |
-2.56% |
13.68% |
|
Germany |
-2.57% |
22.96% |
|
Italy |
-2.50% |
7.05% |
|
Netherlands |
-1.85% |
13.57% |
|
Spain |
-2.72% |
-2.93% |
|
Sweden |
-2.01% |
14.19% |
|
Switzerland |
-2.91% |
14.89% |
|
United Kingdom |
-0.94% |
11.77% |
|
Japan |
-2.14% |
0.78% |
|
AC Far East
ex-Japan |
-1.19% |
14.44% |
|
Hong Kong |
1.86% |
24.37% |
|
Korea |
-2.36% |
10.56% |
|
Malaysia |
0.69% |
13.16% |
|
Singapore |
-0.39% |
26.29% |
|
Taiwan |
-3.18% |
7.95% |
|
Thailand |
-2.16% |
22.46% |
|
EM Latin America |
-1.26% |
4.81% |
|
Brazil |
-1.07% |
-3.23% |
|
Mexico |
-2.44% |
23.23% |
|
Argentina |
-3.24% |
-48.18% |
|
EM (Emerging
Markets) |
-1.52% |
11.13% |
|
Hungary |
-2.24% |
29.45% |
|
India |
-0.27% |
21.44% |
|
Israel |
-1.73% |
0.56% |
|
Russia |
-3.77% |
8.62% |
|
Turkey |
-0.58% |
48.91% |
International Bond
Markets
International
bond markets in developed countries were lower this week, with the J.P. Morgan
Global Government Bond Less U.S. Index losing -0.36%.
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
Developed Markets |
-0.36% |
2.79% |
|
Europe |
|
|
|
Denmark |
-0.17% |
0.98% |
|
France |
-1.00% |
7.14% |
|
Germany |
-0.41% |
2.28% |
|
Italy |
-1.36% |
16.85% |
|
Spain |
-1.80% |
2.52% |
|
Sweden |
-1.39% |
3.67% |
|
United Kingdom |
0.98% |
5.78% |
|
Japan |
-0.11% |
-1.48% |
|
Emerging Markets |
-0.84% |
15.14% |
|
Argentina |
-9.81% |
5.10% |
|
Brazil |
-0.74% |
10.59% |
|
Bulgaria |
0.12% |
8.91% |
|
Russia |
-0.56% |
14.29% |
International Currency
Markets
On
the currency front, the U.S. dollar was stronger against the major currencies
for the week.
|
|
|||
|
Currency |
Close |
Week's Return |
% Change |
|
Japanese yen |
79.560 |
0.23% |
3.29% |
|
Euro |
1.29321 |
0.76% |
0.39% |
|
British pound |
1.60981 |
-0.47% |
-3.58% |
1U.S. dollars per national currency unit.
Sources:
Foreign stock markets and currency sections are from Rimes Technologies, using
MSCI data. International bond markets are from J.P. Morgan.
Note:
All returns are in U.S. dollars. All bond indices are J.P. Morgan. All stock
indices are Morgan Stanley Capital International (MSCI).
|
Equity Indices |
|
|
EAFE: |
MSCI Europe,
Australasia, and Far East Index |
|
Europe Ex-U.K.: |
MSCI Europe ex-U.K.
Index |
|
Far East Ex-Japan: |
MSCI AC Far East
ex-Japan Index |
|
Latin America: |
MSCI Emerging Markets
Latin America Index |
|
Emerging Markets: |
MSCI Emerging
Markets Index |
|
Bond Indices |
|
|
Developed Markets: |
J.P. Morgan Global
Government Bond Less U.S. Index |
|
Emerging Markets: |
J.P. Morgan Emerging
Markets Bond Index Plus |
All charts are for illustrative purposes only and do not represent the
performance of any specific security. Past performance cannot guarantee
future results.