Stocks posted a slight gain last week amid a shortage of news and light holiday trading.
The Dow Jones Industrial Average gained 0.76%, while the Standard & Poor’s 500 added 0.49%. The Nasdaq Composite index advanced 0.32% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, increased 1.13%.1,2,3
Source: YCharts.com, December 30, 2023. Weekly performance is measured from the close of trading on Friday, December 22, to Friday, December 29, close. Treasury note yield is expressed in basis points.
Stocks Gain to End Year
The stock market gains in the final trading days of 2023 capped an exceptional year of performance. The last-week rally also mirrored the historical tendency of stocks to rise at this time of year, a propensity known as the “Santa Claus rally.” The Santa Claus rally covers the final five trading days of the calendar year and the first two days of trading in January.
The average return of the S&P 500 during this Santa Claus rally is 1.3% during the past 73 years. Remember that past performance does not guarantee future results, and individuals cannot invest directly in an index.4
The 2023 week’s gains, led by smaller-capitalization stocks and a handful of industry sectors, were partially erased on Friday as light volume and some profit-taking pressured stocks.
Jobless Claims Rise
Initial jobless claims increased by 12,000 to 218,000, which exceeded economists’ forecasts. The four-week moving average, which better illustrates jobless claim trends, was little changed, coming in at 212,000; this was the lowest number since late October.5
Continuing jobless claims, which measures the number of individuals collecting unemployment benefits, was flat from the previous week at 1.88 million.6
This Week: Key Economic Data
Wednesday: Institute for Supply Management (ISM) Manufacturing Index.
Thursday: Automated Data Processing (ADP) Employment Report. Jobless Claims.
Friday: Employment Situation.
Source: Econoday, December 29, 2023
This Week: Companies Reporting Earnings
Thursday: Walgreens Boots Alliance, Inc. (WBA), Lamb Weston (LW), Conagra Brands (CAG)
Friday: Constellation Brands, Inc. (STZ)
Source: Zacks, December 29, 2023
Need Last Year’s Tax Returns?
Help is available for taxpayers who need tax information for prior years but still need to keep copies of their returns. There are ways to get the information you need.
Keep in mind the IRS recommends that taxpayers keep copies of their returns and any documentation for at least three years after filing:
*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov7
Footnotes and Sources
2. The Wall Street Journal, December 29, 2023
3. The Wall Street Journal, December 29, 2023
4. Nasdaq.com, December 19, 2023.
5. Bloomberg, December 28, 2023.
6. Bloomberg, December 28, 2023.
7. IRS.gov, November 14, 2023.
8. Sharp.com, December 12, 2023.
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. 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.
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