Market in a Minute: December 24-28, 2018
by Rich and Sheila Jamison
The Christmas holiday-shortened week traded with more drama but lighter volume than the two preceding volatile months. The roller coaster hit the big drops and climbed the tall hills. Our major indexes ended the week with gains of from 2.7% to 4.0%. During the ride, we had the worst Christmas Eve in history, a historic day after Christmas rally, a stunning reversal in late-Thursday action and multiple 800-point DJIA intraday swings.
Stocks settled Friday almost where they started after two failed late-afternoon rallies that capped one of the wildest weeks on Wall Street since 2008. Last week’s gains notwithstanding, US and global equities remain on pace for their worst year since then. Last week’s gains pared the December losses for the DJIA (to -9.7%), S&P 500 (to -9.9%), NASDAQ (to -10.2%) and Russell 2000 (to -12.7%).
No new events or issues became known. Economic reports were few, creating no more than a fleeting market impact, if any. Bonds traded near flat, oil fell slightly and volatility slipped from 29.9 to 28.3 according to the CBOE’s VIX.
In essence, the same issues continued from a week – or more – earlier. The government shutdown continues, with both sides digging in for the long haul (at least in their public statements). The China trade/tariff question continues where we left it a week ago. WTI crude oil ended the week $0.23/barrel lower than it began, although it had dipped lower during the week.
A $4.4 billion bid for Sears came in at the 4:00 Friday deadline, skirting its liquidation (for now). The bid was from an ESL affiliate. ESL (a hedge fund) is run by Eddie Lampert, who is also Sear’s Chairman.
Events here are also “more of same.” The ECB’s slowing growth view and increasingly “iffy” Brexit captured the headlines.
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