Week of December 30 - January 3, 2020

Maureen Kelliher, CFA

Maureen Kelliher, CFA

January 7, 2020


Weekly Macro Updates

Bloomberg Consumer Comfort (Dec 29) 63.9 actual, 62.3 prior
Conf. Board Consumer Confidence (Dec) 128.5 est., 126.5 actual, 126.8 prior: R+
Conf. Board Present Situation (Dec) 170.0 actual, 166.6 prior: R-
Conf. Board Expectations (Dec) 97.4 actual, 100.3 prior: R+
Initial Jobless Claims (Dec 28) 220k est., 222k actual, 224k prior: R+
Continuing Claims (Dec 21) 1680k est., 1728K actual, 1723k prior: R+
Markit US Manufacturing PMI (Dec F) 52.5 est., 52.4 actual, 52.5 prior
ISM Manufacturing (Dec) 49.0 est., 47.2 actual, 48.1 prior
ISM New Orders (Dec) 46.8 actual, 47.2 prior
ISM Prices Paid (Dec) 47.8 est., 51.7 actual, 46.7 prior
ISM Employment (Dec) 45.1 actual, 46.6 prior
Markit US Services PMI (Dec F) 52.2 est., 52.8 actual, 52.2 prior
Markit US Composite PMI (Dec F) 52.7 actual, 52.2 prior
Construction Spending MoM (Nov) 0.4% est., 0.6% actual, 0.1% prior: R+

 Strong or Improving
 Inconclusive or lacking trend
 Weak or declining
R+ Revised up
R- Revised down

Directional change based on general
long-term tends.

Capital Market Implications

While consumer readings continued to be buoyant, manufacturing releases were neutral to negative last week.  ISM manufacturing registered its fifth month of contraction and its lowest reading since June 2009, driven by falling demand and consumption, as trade issues continued to affect new orders and are causing orders backlogs to shrink.  The Markit Services PMI readings were slightly better than expected, with non-manufacturing PMI’s later this week also expected to rise.  Construction spending came in better than expected, driven by private residential and public construction. 

Ongoing geopolitical tensions with Iran weighed on stocks last week, with the S&P 500 Index finishing down -0.1%.  The Dow was flat and smaller cap stocks lost -0.4%.  Growth stocks were up slightly, at 0.2%, while value was down -0.4%.  International markets were mixed for the first few days of the year, with developed markets flat while emerging markets gained 0.5%.  Bonds were also positive for the week, with the aggregate index returning 0.4%.  Corporate and municipal bonds gained 0.4% and 0.5% respectively.  High yield bonds were up 0.2%, with returns dampened by their correlation with stocks.   

Conference Board Consumer Confidence