As a nice holiday boost, lower-skilled employees are finally seeing stronger wage growth – after nearly a decade of stagnant wages. According to the Wall Street Journal, pay for the bottom 25% of earners outpaced that of high-skilled workers for the first time since 2010. Higher wages can be a sign of inflation, but given that inflation levels have been range-bound and well under the Fed’s target, this is likely not a concern. The holiday season also brought strong sales with online sales outpacing that of traditional retail stores. Finally, we saw the replacement of Boeing’s CEO this week. This was in light of the aftermath of the 737 MAX malfunctions and concern that the culture and lack of action at Boeing was ultimately responsible for the crashes caused by the faulty flight-control system.
With two more trading days left this year, the S&P 500 is poised to have its highest calendar year return since 2013. The index had another strong week – up 0.7%. Global stocks were up as well with only small-cap stocks lagging behind. Another huge move this year has been on the rate side, with the Fed decreasing rates by 0.25% in August, September, and October. During the year, the 10-Year Treasury yield went from a high of nearly 2.8% to a low of nearly 1.4% before settling today near the 1.9% mark. With the wave of optimism, Telsa’s stock also proved resilient this year after Elon Musk’s missteps with the SEC in 2018. That fall, Musk tweeted that he had private funding secured at a level of $420 a share – which was a 20% premium to levels at that time. The stock price now surpasses that amount and closed out the week at slightly above $430 a share.
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