Markets fluctuate as they digest gains made this week

Dow fell 35, advancers just ahead of decliners & NAZ added 3.  The MLP index rose 3+ to the 293s & the REIT index drifted fractionally lower to the 322s.  Junk bond funds were mixed after their recent run & Treasuries inched higher.  Oil keeps climbing (into the 38s) & gold edged higher.

AMJ (Alerian MLP Index tracking fund)

CLG16.NYM

...Crude Oil Feb 16

...38.04

...0.54

(1.4%)

GCZ15.CMX

...Gold Dec 15

.....1,075.80

...6.40

(0.6%)

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Filings for unemployment benefits in the US decreased to a 4-week low, indicating a still-solid labor market approaching the new year.  Jobless claims fell 5K to 267K, according to the Labor Dept.  The forecast called for 270K.  Applications are hovering close to the 255K level reached in Jul, the lowest since the 1970s.  A tighter labor market this year has put a premium on skilled & experienced workers, encouraging employers to forgo reductions in staff.  

The 4-week average of claims, a less-volatile measure than the weekly figure, increased to 272K from 271K in the prior week.  The number continuing to receive jobless benefits declined 47K in the latest week, the most since mid-Sep, to 2.2M.  The unemployment rate among people eligible for benefits dropped to 1.6% from 1.7%.  Since the beginning of Mar, claims have held below the 300K level that is consistent with strength in the labor market.

Applications for U.S. Jobless Benefits Decline to Four-Week Low

Investors pulled more money from US mutual funds last week than they have in any 7-day period in the past 2½ years.  Net redemptions reached $28.6B in the week ended Dec 16, according to a statement from then Investment Company Institute.  It was the biggest weekly outflow since Jun 2013.  Some of the redemptions might reflect year-end tax-loss selling, which are sales made for tax purposes, ICI said.  Investors withdrew $11.1B from stock funds, $12B from bond funds & $5.6B from funds that buy a mix of stocks & bonds.  Municipal bond funds attracted $647M, the only category that saw inflows.  Mutual funds have experienced net redemptions every month since Jul.  In each of the first 6 months of the year, funds gathered money.

Investors Pull Out of Mutual Funds at the Fastest Rate in Two Years

China’s stocks fell the most in 2 weeks as health-care & property companies slumped amid speculation recent gains were overdone, & concern grew IPOs will divert funds away from existing equities.  The Shanghai Composite Index dropped 0.7% to 3612, capping the steepest loss since Dec 8.  Trading volume in Shanghai was 16% below the 30-day average, with most regional markets shut for the Christmas holidays.

Hong Kong’s Hang Seng Enterprises Index rose 0.7%, capping a 3.3% gain this week.  The Hang Seng Index advanced for a 4th day, rising 0.4%.  The Shanghai gauge has rebounded 23% from the Aug low & is heading for the biggest gain among major benchmark global indexes in Q4.  While valuations are still below levels reached earlier in the year, they aren’t cheap.  The median stock on mainland exchanges trades at 74X earnings, the highest among the world’s 10 biggest markets.

China's Stocks Drop Most in Two Weeks as IPO Demand Saps Funds

There is nothing special going as the holiday trading week concludes.  The markets close shortly & this has been a very good week for stocks, in a heavily oversold market.  Next week is not expected to be eventful.

Dow Jones Industrials