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Bob Carey
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  US Stock Markets Ended Dec. 6, 2019
Posted Under: Weekly Market Commentary

 
The S&P 500 Index ripped up to close last week near all-time highs. Stocks closed lower early last week but were up nearly 1% Friday after the Bureau of Labor Statics (BLS) announced November Jobs numbers well ahead of economist estimates. The BLS announced November Nonfarm Payrolls and Private Payrolls grew 266k and 254k respectively. These were the highest numbers since January and the highest November since 2014. The unemployment rate hit a 50-year low at 3.5% and wages grew 3.1%. With strength in jobs, unemployment and wages, U.S. consumer spending is likely to remain strong thru the holiday shopping season. There were a few attractive earnings announcements last week. Ulta Beauty Inc. was up over 11% on Friday after they announced 3Q revenue and earnings was better than most analysts had feared given the cosmetic company unexpectedly cut guidance last quarter. DocuSign Inc. rallied over 8% Friday after they beat and raised revenue guidance. After the announcement, the e-signature software provider had a slew of sell-side analyst hiking price targets as business prospects continued to improve. HealthEquity Inc. also announced strong quarterly results and raised revenue guidance. The Health Savings Account (HSA) provider rallied over 7% last week as integration of their WageWorks acquisition fueled results. Currently the trailing P/E on the S&P 500 Index sits near 20.9x. The average monthly trailing P/E for the Index since November 2016 is 20.2x. Which means the index is near its average valuation over the last 3 years. According to Bloomberg, over the next 12 months, earnings per share growth for the Index is estimated to be ~14%. Given average valuations and strong earnings growth estimates, stocks appear to have plenty of room to move higher if the economic backdrop remains strong.
Posted on Monday, December 9, 2019 @ 8:35 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L. P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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