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Weekly Financial Market Update - December 21, 2018

Christopher LaPorta

December 24, 2018


Concerns mounted in equity markets last week as the S&P 500 declined 7.0% while the tech-heavy Nasdaq shed 8.4%, one of the worst weeks since March. A potential U.S. government shutdown, a Federal Reserve viewed as too aggressive, continued trade tensions with China, and signs of slowing global growth have combined to weigh heavily on markets in recent weeks.

U.S. small cap stocks touched bear market territory on Monday with the Russell 2000 index down over 21% since its high in August. On average, small cap stocks tend to have a higher degree of leverage, and therefore more sensitivity to interest rate hikes. Gold (which investors tend to flock to during times of market stress) finished the week up 1.5%. Investors debated whether a slowdown in housing and recent economic data suggested a possible inflection point in the economy. 

For more including an update on interest rates from the Federal Reserve and consumer sentiment, read our Weekly Investment Update