Stocks Enter New Territory on Mixed Economic Data

By Horizon Investments

As corporate earnings season continues, we’re seeing especially positive results from companies in economically cyclical sectors such as industrials and materials. Additionally, technology companies’ financial results are benefiting from strong microchip demand among automobile and smartphone makers.

Economic data in the U.S. was mixed last week, with stronger-than-expected manufacturing PMI (Purchasing Managers’ Index) results offset by higher-than-expected jobless claims and slower-than-anticipated growth of existing home sales.

European economic results were also mixed. Overall, Eurozone PMI came in better than expected, and GDP in the UK grew more than expected in the fourth quarter (2.1%)—but consumer confidence fell short of estimates.

GAIN: Active Asset Allocation

Equity market returns were strong across the board last week, with the Dow surpassing 20,000 for the first time and European stocks hitting their highest levels in almost 13 months. International markets and small-cap stocks lead the charge, outpacing domestic equities and large-company shares, respectively.