The record run for U.S. equities to start the New Year cooled somewhat with stocks finishing mixed, as the Nasdaq and S&P 500 marked fresh highs, as market participants await a robust economic calendar and the unofficial start to Q4 earnings season. Treasury yields and gold were little changed and crude oil prices saw only a modest gain after a recent rally, while the U.S. dollar was solidly higher. On the equity front, Lululemon provided upbeat guidance but warned of a tax expense and Kohl’s guidance gave its shares a boost, while GoPro’s revenue outlook severely missed expectations and CNBC reported that the company may be mulling a sale.

The Dow Jones Industrial Average (DJIA) declined 13 points (0.1%) to 25,283, while the S&P 500 Index gained 5 points (0.2%) to 2,748, and the Nasdaq Composite increased 21 points (0.3%) to 7,157. In moderate volume, 806 million shares were traded on the NYSE and 2.0 billion shares changed hands on the Nasdaq. WTI crude oil advanced $0.29 to $61.73 per barrel and wholesale gasoline was unchanged at $1.79 per gallon. Elsewhere, the Bloomberg gold spot price inched $0.20 higher to $1,319.70 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—gained 0.5% to 92.37.

Consumer credit, released in the final hour of trading, showed consumer borrowing jumped by $28.0 billion during November, the most in nearly 16 years, and well more than the $18.0 billion forecast of economists polled by Bloomberg, while October’s figure was unadjusted at an increase of $20.5 billion. Non-revolving debt, which includes student loans and loans for vehicles and mobile homes, rose by $16.8 billion, a 7.2% increase year-over-year (y/y), while revolving debt, which includes credit cards, surged by $11.2 billion, a 13.3% y/y rise.

Treasuries were unchanged, showing little reaction to the consumer credit report, as the yields on the 2-year and 10-year notes, as well as the 30-year bond were flat at 1.96%, 2.48% and 2.81%, respectively. Treasury yields have been little changed following a recent rally and the U.S. dollar has recovered modestly.

Schwab Center for Financial Research – Market Analysis Group

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