Many Reasons to Give Thanks

What Happened This Week?

The S&P 500, Dow, and NASDAQ hit all-time highs: For the third straight week, the three major domestic stock indexes increased - and they all reached record high levels, which has not happened simultaneously since 1999. All of this is happening just weeks after election results that all of the 'experts' said would crash the markets. PLEASE REMEMBER this November 2016 period the next time all of the experts in the media are predicting disastrous outcomes to some event, especially if 'they' are all in agreement.  

U.S. Dollar/Euro move closer together: A combination of positive news in the United States and ongoing economic challenges in Europe have moved the dollar and euro increasingly closer together for the past three weeks. In fact, Deutsche Bank now predicts parity between the two currencies by the second quarter of 2017- and the dollar to be worth more than the euro by the third quarter. The two currencies have not had equal value since November 2002. At the euro's highest in July 2008, it was worth more than 1.6 times as much as the dollar.
A rising dollar signals U.S. economic strength but can also negatively affect exports. While we wait to see whether EUR/USD parity is ahead, in the meantime, if you have European travels planned, the favorable exchange rate is certain to be welcome news. 

Oil continues to falter: Of course, not everything can be perfect in the markets. Oil continued its patchy performance to close at $47.24 on Friday. OPEC meets this week, and no one knows whether they will be able to reach a deal for oil producers to curb production. As of now, the markets are still over-saturated with oil, but we're significantly above the 10-year low of around $30 per barrel that we reached earlier this year. If production stabilizes and prices rise to a more sustainable level, then oil companies will be better able to invest in new long-term projects. For the meantime, as we all wait to see how OPEC and the major oil producers decide to move forward, enjoy the low gas prices while they last.

As we've mentioned in recent market updates, the Federal Reserve's December meeting remains the next big event on the economic calendar. The odds of an interest rate increase are now nearly 100%. But if 2016 has shown us anything, it's that even highly predicted outcomes don't always occur. The bond market itself has already reacted to the November news, so it will be interesting to see if the Fed follows suit.
As always, we will continue to keep you informed as events unfold.

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