The market melt-up accelerated last week, as the S&P 500 surged by 1.5 percent to 2,642.2. That was the second weekly increase in a row and the largest gain in nearly three months. Further, the benchmark index ended Friday up an outstanding 18.0 percent year-to-date, and just 0.2 percent below the all-time closing high (hit on Thursday). As for performance during the month of November, the S&P 500 experienced a few scares (spikes in volatility) but still managed to post a 2.8 percent gain, the 8th monthly rise in a row and the largest increase since February. Participants in tax-advantaged 401(k) plans also fared well in November, according to new data from the Employee Benefit Research Institute (EBRI). For example, the average 401(k) account balance for younger (25-34), less tenured (1-4 years) workers rose by 3.3 percent last month, while older workers (55-64) with more than 20 years of tenure saw their 401(k) balances rise by an average of 2.0 percent.
Even more impressive is that since the end of 2014, the average 401(k) account balance for younger, less-tenured workers has surged by 159.9 percent, while the S&P 500 has gained just 28.6 percent (through the end of November 2017). Older, more-tenured workers saw their 401(k) balances rise by an average of “only” 33.9 percent during this same period, not surprising since these individuals tend to have much larger accounts that are less sensitive to both contribution flows and market fluctuations. More importantly, these substantial gains should provide further evidence of how effective consistent participation in a tax-advantaged savings vehicle can be when trying to amass a significant retirement nest egg. Additional assistance is available through the use of dollar-cost averaging and regularly consulting with a professional financial advisor. As always, we are here to help with any questions you may have.
To recap a few of the things we learned about the economy last week, the positives included that new home sales rose, pending home sales jumped, construction spending rebounded, initial jobless claims fell, household inflation pressures remained muted, disposable income increased, the personal savings rate improved, consumer confidence lifted to a 17-year high, and U.S. gross domestic product (GDP) growth in the third quarter was revised higher. As for the negatives, mortgage and refinance applications declined, the nation’s trade deficit widened, housing inflation remained elevated, consumer spending growth slowed, and gauges of both national and regional manufacturing activity cooled. This week the pace of economic data picks up slightly with several important reports on the services sector, consumers, productivity, and employment scheduled to be released, including the potentially market-moving November job report from the Bureau of Labor Statistics (BLS) due out on Friday.
**A more detailed snapshot of the U.S. economy can be found here.**
What To Watch:
- Factory Orders 10:00 AM ET
- MBA Mortgage Applications 7:00 AM ET
- ADP Employment Report 8:15 AM ET
- Productivity and Costs 8:30 AM ET
- EIA Petroleum Status Report 10:30 AM ET
- Challenger Job-Cut Report 7:30 AM ET
- Jobless Claims 8:30 AM ET
- William Dudley Speaks 8:30 AM ET
- Bloomberg Consumer Comfort Index 9:45 AM ET
- EIA Natural Gas Report 10:30 AM ET
- Consumer Credit 3:00 PM ET
- Employment Situation 8:30 AM ET
- Consumer Sentiment 10:00 AM ET
- Wholesale Trade 10:00 AM ET
- Baker-Hughes Rig Count 1:00 PM ET
Sources: Econoday, EBRI, FRBSL
Post author: Charles Couch