Last Week
The stock market was volatile during holiday-shortened trading, with light volume as many on Wall Street opted to take an extended holiday. There were hopeful signs of a Santa Claus Rally early in the week, as stocks posted their best Christmas Eve session since 1974 on Tuesday. That holiday cheer was deflated on Friday as most of the gains were wiped out. Nevertheless, the two-week losing streak was snapped with the S&P 500 gaining + 0.7%, the Nasdaq Composite +0.8%, and the Russell 2000 +0.2%. It was a mixed bag with an even distribution of advancing and declining issues and no significant under or outperforming industry sectors. The bond market sell-off continued, with the yield on the 10-year Treasury rising another 10 basis points to finish at 4.62%. That rate has now increased a full 1% over the last 3 months to approach its highest level in over 15 years. At North Star, we have been keeping the durations on our fixed-income portfolios very short, but we believe that if rates reach 5%, it would make sense to start lengthening by building bond ladders.
There were no significant business news stories or economic releases during the week. The good cheer on Monday might have been partially due to the U.S. government avoiding a shutdown. There was no good cheer, or cheers at all, at Soldier Field on Thursday night as the Bears dropped their tenth straight game as a cold rain fell.
This Week
Trading will be light and choppy with the markets closed on Wednesday for the New Year Holiday.
The stocks mentioned above may be holdings in our mutual funds. For more information, please visit www.nsinvestfunds.com.