U.S. Stocks gained last week, led by Small-Caps. The S&P 500 Index closed up about 1% to 2,182, while the Russell 2000 Index finished higher by 2.5%.
Treasuries suffered another weekly sell-off pushing yields to the highest level since late 2015. The 10-Year U.S. Treasury yield rose to 2.34%, up sharply from 1.85% just prior to the U.S. presidential election.
The U.S. dollar extended its powerful post-election rally, which threatens to create destabilizing headwinds for the long-running but relatively slow U.S. expansion.
Healthcare and Industrial stocks lagged the broader market as investors continued a rotation into Financials, especially Banks. Bank of America (BAC), Citigroup (C), and PNC (PNC), for example, were all up 5%+. Consumer Discretionary stocks appear to be regaining favor.
Encouragingly, earnings for S&P 500 companies rose by a modest 3% for the third quarter after declining for five straight quarters, according to FactSet data. Analysts expect similar growth in the current quarter.
A number of U.S. Data points were released throughout the week. Retail Sales jumped 0.8% in October, and September was revised higher to 1.0%, a 4 point increase. The Producer Price Index (PPI) was unchanged overall for October and down 0.2% when excluding food and energy. Also unchanged was Industrial Production, however, manufacturing volume was up for a second straight month. Lastly, Consumer Price Index (CPI) rose 0.4% in the month lead by a 3.5% increase in energy.
Next week is shortened by the Thanksgiving holiday. The Federal Reserve's November meeting minutes will be released on Wednesday.