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Market Recap

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December 9, 2024

 

U.S. stocks thrive amid turmoil.

 

The performance of the U.S. stock market is striking. Last week, the Standard & Poor’s (S&P) 500 closed at a record high for the 57th time this year, reported Rita Nazareth of Bloomberg. Here are some of the notable factors that sent stocks higher last week:

 

Political upheaval overseas. A declaration and cancellation of martial law in South Korea and the toppling of the French government roiled financial markets overseas, making United States markets attractive. “The political chaos spanning Seoul to Paris this week is reinforcing why many investors have chosen to stick to American markets,” reported Simon Kennedy and Phil Serafino of Bloomberg.

 

A powerful technology rally. Spending and excitement around the potential of artificial intelligence (AI) continue to delight investors. Both the communication services and information technology sectors are expected to report double-digit earnings growth during the last three months of 2024, reported John Butters of Factset. 

 

Rising company profits have been driven by higher spending. “While the ROI [return on investment] of any given AI project remains uncertain, one thing is becoming clear: CIOs [chief investment officers] will be spending a whole lot more on the technology in the years ahead. Research firm IDC projects worldwide spending on technology to support AI strategies will reach $337 billion in 2025—and more than double to $749 billion by 2028,” reported Paula Rooney of CIO.

 

Continued U.S. economic strength. Employers added 227,000 new jobs in November. That was well above the 200,000 forecasted, reported Barron’s. Stocks rose on the news, and so did expectations that the Federal Reserve will lower interest rates again at its December meeting. Lower rates are typically good for companies because they often lower the cost of borrowing and lead to higher spending.

 

By the end of the week, the S&P 500 and Nasdaq Composite Indexes were higher. The Dow Jones Industrial Average finished lower as it has less exposure to technology stocks, according to Barron’s, and more significant exposure to a large health insurance company that saw its stock price fall sharply after the assassination of its chief executive officer last week, reported Caroline Valetkevitch of Reuters. Treasury bonds gained last week, too, as yields moved lower on expectations of a Fed rate cut.

 

When any asset class experiences significant gains during the year, it’s important to review your investment allocations and make adjustments to maintain the risk profile that makes you most comfortable. Rebalancing also helps investors follow an important investment strategy: buy low and sell high.

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Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Private Advisor Group, a registered investment advisor. Private Advisor Group and Parks Wealth Management are separate entities from LPL Financial. 

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Sources:

https://www.bloomberg.com/news/articles/2024-12-05/stock-market-today-dow-s-p-live-updates?itm

https://www.bloomberg.com/news/newsletters/2024-12-04/south-korea-france-make-the-case-for-sticking-to-us-markets

https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_120624A.pdf [Page 10]

https://www.cio.com/article/3601606/cios-to-spend-ambitiously-on-ai-in-2025-and-beyond.html

https://www.bls.gov/news.release/empsit.nr0.html

https://www.barrons.com/livecoverage/november-jobs-report-data-today?mod=hp_LEDE_C_1

https://www.barrons.com/livecoverage/stock-market-today-120624/card/tech-stocks-leave-the-dow-in-the-dust-iTLLzgA626V7ivhHLcxL?

https://www.reuters.com/markets/us/futures-stall-after-wall-streets-record-high-closing-2024-12-05/#:~:text=UnitedHealth's%20(UNH.N)%20%2C,opens%20new%20tab%20fell%201.1%25.

https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202412

https://www.aarp.org/pri/topics/work-finances-retirement/fraud-consumer-protection/holiday-shopping-scams-2024/

https://www.ic3.gov/AnnualReport/Reports/2023_IC3Report.pdf [Pages 3 and 7]

https://www.fbi.gov/contact-us/field-offices/sanfrancisco/news/fbi-san-francisco-warns-of-holiday-scams-targeting-shoppers-and-donors

https://www.forbes.com/sites/larsdaniel/2024/12/03/fbi-warning-online-holiday-shopping-scams-could-ruin-your-2024-season/

https://parade.com/living/stephen-hawking-quotes

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