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Weekly Market Insights: Stocks Spark Late Week Rally

Weekly Market Insights: Stocks Spark Late Week Rally

| December 12, 2023

A late-week, two-day rally left stocks higher, adding to November’s gains as the last month of trading for 2023 began.

The Dow Jones Industrial Average was flat (+0.01%), while the Standard & Poor’s 500 gained 0.21%. The Nasdaq Composite index advanced 0.69% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, was up 0.37%.1,2,3

Stocks Extend Gains

The relationship between the bond and stock markets–which pushed stocks higher in November (i.e., falling bond yields, rising stock prices)–disappeared last week, with stocks falling in the first three days of the week despite declining yields. Yields dropped following a weak job openings report, the ADP employment update, and a substantial productivity revision.

On Thursday, investor enthusiasm returned with force on Artificial Intelligence (AI) related news. One AI chip manufacturer announced a new AI chip, followed by a mega-cap tech company unveiling an enhanced version of its AI model for business use. Stocks continued their climb on Friday despite rising yields, as investors viewed a stronger-than-expected employment report as increasing the potential for a soft landing.

Productivity Surges

Higher productivity may be the most effective and preferred way to reduce inflation. Last week’s revised third-quarter productivity report saw an upward revision of the annualized productivity growth from the initial report of 4.7% to 5.2%; this was welcome news on the inflation front and an encouraging development for future corporate profits.4

The 5.2% jump in productivity represented the fastest pace since the third quarter of 2020. The report also showed unit labor costs falling at a 1.2% annualized pace, reflecting a cooling of wage-growth inflationary pressures. Productivity has increased for two straight quarters, potentially allowing the Fed to ease its restrictive monetary policy.5

This Week: Key Economic Data

Tuesday: Consumer Price Index (CPI). 

Wednesday: Producer Price Index (PPI). FOMC Announcement.

Thursday: Retail Sales. Jobless Claims.

Friday: Industrial Production. Purchasing Managers’ Index (PMI) Composite Flash.

Source: Econoday, December 8, 2023
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

This Week: Companies Reporting Earnings

Wednesday: Adobe, Inc. (ADBE)

Thursday: Costco Wholesale Corporation (COST)

Friday: Lennar Corporation (LEN)

Source: Zacks, December 8, 2023
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. 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. Companies may reschedule when they report earnings without notice.

We are closing in on the end of the year and upcoming holidays. Just a friendly reminder the office will be closed December 22nd, 25th, & 26th. Also, we will be closed on January 1st. Have a great rest of your week! Sean, Erin, & Trish.

**Important Information Below** 

Schwab does not directly call out to our clients. Please reach out to us if you ever have any suspicious activity or questions at all. Please review an article from Schwab below. 

Fraudsters don't take holidays: Impersonating Schwab Employees

The holidays provide a great opportunity for fraudsters to unleash their schemes, knowing that we are busy traveling, shopping, and spending time with friends and families, all the while using technology that gives them an opportunity to attack.

The latest threat that's come to the attention of the advisor services fraud prevention team are reports of imposters posing as Schwab employees, contacting advisors and clients via phone and other channels, including email and text messages. 

  • First, the fraudster gains access to the client's personal information, like first and last name, phone number, and home address, potentially from the dark web or a hacked website, for example, social media. 
  • The imposter may spoof a Schwab phone number to call the client and then identify themselves as an employee in the fraud department.
  • The fraudster alleges that a suspicious charge has been found in a client's Schwab account and makes the client aware that the charges will need to be reversed.
  • The fraudster will use social engineering to get the client to provide their Schwab Alliance username, then when the system sends an automated SMS for verification, the fraudster requests the code from the client.
  • Once the fraudster has the SMS code, they will update client's Schwab Alliance password, log into the client's account, and initiate unauthorized transactions. 
  • These criminals know that worries about account breaches are heightened during the holidays, when increased spending can provide more opportunities for key information to fall into the wrong hands. 

You can help us mitigate fraud this holiday season by sharing these fraud prevention tips.

  • Avoid supplying any personal identifying information in an email or over the phone, even if you think you are talking to Schwab. Note: You may verify that you are speaking with Schwab by ending the call and calling a Schwab phone number that is known to you.
  • If Schwab sends you an SMS text code to verify account access, do not share this with anyone, as legitimate Schwab representatives will never ask for this information.
  • Please contact Schwab immediately to report all suspicious or fraudulent activity.

Schwab Alliance at 800-515-2157.

Temple of Kukulkan, Chichen Itza, Yucatan, Mexico

Footnotes and Sources

1. The Wall Street Journal, December 8, 2023

2. The Wall Street Journal, December 8, 2023

3. The Wall Street Journal, December 8, 2023

4. MarketWatch, December 6, 2023

5. MarketWatch, December 6, 2023

6., May 1, 2023 

7., October 9, 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.

International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.

Please consult your financial professional for additional information.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

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