US Stocks Ended Dec. 23, 2016
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Once again equity markets were positive for the week as the S&P 500 advanced 0.29%. Predictably, trading volume this week was thin, as names in the S&P 500 together averaged 473m shares traded per day, compared to the average 643m shares per day so far in 2016. Despite the year end light volume, the S&P 500 is now up 3.08% in December, 4.95% in 4Q16 and 13.17% YTD. Assuming the index remains positive in 2016, this would mark the 8th consecutive calendar year of gains. The index was up 8 straight calendar years from 1982-1989 and up 9 straight calendar years from 1991-1999. The Philadelphia Stock Exchange Semiconductor index is up over 42% YTD and up nearly 11.5% so far in 4Q16. The run in semi names can be attributed to significant demand recovery during 2016, along with continued technological innovation. Micron Technology, a large cap semi name, was the top performer in the S&P 500 this week as its shares ran up over 14%. Micron released their quarterly report which bested analysts' estimates on both earnings and revenue, along with strong corporate guidance for 2017. Micron credited strong performance to significant improvement in PC DRAM pricing. Since the U.S. Presidential election, international stock markets, particularly in Europe, are also starting to benefit. The STOXX Europe 600 index, which is comprised of Europe's 600 largest equities, is up over 5.3% in EUR (3.8% in USD) during the month of December. Fueling the rally has been more of a 'risk on' trade in Europe as cyclicals have advanced more than defensive names. Looking ahead to next week, U.S. equity markets are closed on Monday for Christmas. Further, we would expect trading volumes to remain thin next week as investors enjoy their holiday, and potentially delay taxable events until next year.
Posted on Tuesday, December 27, 2016 @ 8:28 AM

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.