Week in Review with Maureen Kelliher
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Each week, Investment Officer and resident economist Maureen Kelliher comments on investment trends and economic news which impact the financial markets.

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Capital Market Implications for the Week of December 4 - 8, 2017

November’s employment reports were last week’s major releases. Both ADP’s employment change report and the Bureau of Labor Statistics change in nonfarm payrolls report indicated the economy continued to support healthy job growth last month: ADP reported 190,000 jobs were created during the month while the Bureau’s release was higher at a gain of 228,000 jobs. November’s unemployment rate at 4.1 percent was unchanged from the previous month. With the workforce growing at approximately 100,000 new entrants monthly, the current pace of job creation suggests the economy is at or close to full employment. Finally, although consumer confidence, as measured by the University of Michigan Consumer Sentiment Index, declined in November, the NFIB Small Business Optimism Index reached a post-recession high of 107.5.

As market participants awaited the final version of the tax bill, capital markets meandered throughout the five day sessions. For the week overall, the S&P 500 Index gained 0.4 percent and the Dow Jones Industrial Average rose 0.5 percent. The week’s best performing equity sectors were financials and industrials, which increased 1.5 percent and 1.4 percent, respectively. The worst performing sectors for the week were real estate and utilities, which both lost -1.0 percent. International stocks ended last week relatively flat, as the MSCI EAFE Index was unchanged while emerging markets declined -0.5 percent. Interest rates held steady for the week and, as such, bond prices were little changed as well. The Barclays U.S. Aggregate Bond Index, U.S. corporate bonds, and high yield bonds all ended the week relatively unchanged, while ten-year municipal bonds rebounded 1.0 percent after having declined for the previous two weeks.

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Week in Review

Securities and other investment products are:

Wealth Management Disclosure

 

Weekly Macro Updates

 

  • Initial Unemployment Claims (week of 12/2) 240k est., 236k actual, 238k prior
  • Continuing Claims (week of 11/25) 1919k est., 1908k actual, 1960k prior
  • Prod Price Index Ex Food & Energy YoY (Nov) 2.4% est., 2.4% actual, 2.4% prior
  • ISM Non-Manufacturing Composite (Nov) 59.0 est., 57.4 actual, 60.1 prior
  • ADP Employment Change (Nov) 190k est., 190k actual, 235k prior
  • Household Change in Net Worth (3Q) $1742b actual, $1276b prior-R-
  • Consumer Credit (Oct) $17.000b est., $20.519b actual, $19.211b prior-R-
  • Change in Nonfarm Payrolls (Nov) 195k est., 228k actual, 244k prior
  • Change in Manufacturing Payrolls (Nov) 15k est., 31k actual, 23k prior
  • Unemployment Rate (Nov) 4.1% est., 4.1% actual, 4.1% prior
  • Average Hourly Earnings YoY (Nov) 2.7% est., 2.5% actual, 2.3% prior-R-
  • NFIB Small Business Optimism (Nov) 104.0 est., 107.5 actual, 103.8 prior
  • University of Michigan Sentiment Index (Dec P) 99.0 est., 96.8 actual, 98.5 prior
  • JOLTS Job Openings (Oct) 6135 est., 5996 actual, 6177 prior
  • Strong or Improving
  • Inconclusive or lacking trend
  • Weak or declining

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