Market Commentary for the week of December 5, 2016

The Markets

Bank stocks cooled, and a better-than-expected jobs report strengthened expectations of an interest rate hike this month. But the markets appeared to have already priced the increase in, resulting in little change in stocks. For the week, the Dow rose 0.22 percent to close at 19,170.42. The S&P fell 0.91 percent to finish at 2,191.95, and the NASDAQ lost 2.65 percent to end the week at 5,255.65.

Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. The NASDAQ is based on price return, which is the capital appreciation of the portfolio, excluding income generated by the assets in the portfolio in the form of interest and dividends. (TR) indicates total return. (PR) indicates price return. MSCI EAFE returns stated in U.S. dollars.

A Lock? — As of the close of trading on the Friday before the presidential election (Nov. 4), the bond market was showing a 67 percent chance of a rate hike at its Dec. 14 meeting. As of the close of trading on Friday, Nov. 25, the bond market was showing a 94 percent chance of a rate hike at its Dec. 14 meeting (source: Federal Reserve, BTN Research).

Higher and Higher — After reaching another new all-time closing high on Friday, Nov. 25, the S&P 500 has set 122 record closes in the ongoing bull market that began on March 10, 2009, including 14 record highs in 2016 alone (source: BTN Research).

Decaying — The United States will need to spend $3.32 trillion over the next decade to fix the nation’s infrastructure, including $2.04 trillion in roads and bridges (source: American Society of Civil Engineers, BTN Research).

* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright December 2016. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI# 1656658.1