In regards to stocks, it was a rocky month. The S&P 500 plummeted 4% in the week following the President’s reelection before rebounding on economic optimism. The S&P 500 finished November 0.58% higher even though there has been little progress on talks to prevent spending cuts and tax increases. Some analysts doubt the dire predictions on the tax increase. Year -to-date (Nov 30) total returns on the S&P 500 are a welcome 14.96%.
In foreign markets, the MSCI EAFE Index dropped 2.67% before bouncing back to finish the month 2.42% higher despite headlines that the economic picture in Europe is likely to get worse before it gets better. Year-to-date (Nov 30) total returns on the EAFE Index are a comfortable 13.78%. Emerging markets, as measured by the MSCI Emerging Markets (EM) Index, returned 1.2% in November. Year-to-date (Nov 30) total returns on the MSCI EM Index are 12.71%.
Commodity prices were little changed for the month as measured by the 0.05% decline in the Dow Jones AIG commodity Index. Precious metals (DJ UBS Gold Index) declined 0.50% and Real Estate Securities (DJ Wilshire REIT Index) gave up 0.81%.
Shifting to fixed income, bond returns as measured by the Barclays Aggregate Bond Index edged slightly higher (0.15%) in November. Inflation protected securities as measured by the ML US TIP index gained 0.52%.
Mary Schapiro announced last week that she would step down as chairwoman of the Securities and Exchange Commission (S.E.C). One S.E.C. commissioner was named as interim chairwoman. But the press reports that Sallie Krawcheck, a former financial services executive at Bank of America and Citigroup, is the new Candidate. MIT professor Simon Johnson wonders if she is the best candidate to put in charge of our principal markets regulator. He questions if she really understands what it would take to better protect investors. And he raises an important question “what about her purely industry-based background? – Is she capable of marshaling the S.E.C.’s staff to follow through on stiffer regulations? Food for thought.