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Financial News for the Week Ending December 21st

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

Stocks continued to reach record highs over the week on positive US economic news.  The Dow rose 3.0% for the week reaching an inflation adjusted all time high on Friday and the S&P 500 was up 2.4%.  World market rose as well with Japan up 3.0% and Europe rising 3.7%.  The 10 year Treasury yield rose over the week as bonds fell due the Fed’s announcement of its tapering plans.  The yield on the 10 year Treasury ended the week at 2.89%.   

The Fed announced at the conclusion of its most recent meeting that it would reduce its monthly bond purchases by $10 billion to $75 billion as they believed the economy was on better footing.  They also made new comments that short term lending rates would remain near zero long after the bond buying program ends.

On the announcement that the Fed is easing its bond purchases gold fell to $1,195, its lowest level since 2010.  Gold is down 29% year to date making it likely to post its first annual drop in 13 years. 

Revised data for third quarter GDP shows the US economy picking up steam.  The US grew at a 4.1% annual rate in the third quarter the fastest pace in two years.  Consumer spending, a key driver in the recovery, rose at a 2% rate compared to the 1.4% previously estimated. 

The CPI rose just 1.2% over the past year and the EU inflation rate gained just 0.9%.  Inflation is low despite unprecedented simulative efforts from central banks around the world. 

Industrial output has surpassed the pre-recession peak for the first time as it rose 1.1% from October.  It’s the fastest pace in a year. 

FedEx and Oralce both posted strong earnings reports.

Target announced that a security breach made 40 million customers’ credit and debit card information available to hackers. 


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