Week of November 11 - 15, 2019

Maureen Kelliher, CFA

Maureen Kelliher, CFA

November 20, 2019

Weekly Economic Review

Weekly Macro Updates

Initial Jobless Claims (Nov 9) 215k est., 225k actual, 211k prior
Continuing Claims (Nov 2) 1683k est., 1683k actual, 1693k prior
CPI YoY (Oct) 1.7% est., 1.8% actual, 1.7% prior
CPI Ex Food & Energy YoY (Oct) 2.4% est., 2.3% actual, 2.4% prior
Real Average Hourly Earnings YoY (Oct) 1.2% actual, 1.3% prior: R+
PPI Final Demand YoY (Oct) 0.9% est., 1.1% actual, 1.4% prior
PPI Ex Food & Energy YoY (Oct) 1.5% est., 1.6% actual, 2.0% prior
Empire Manufacturing (Nov) 6.0 est., 2.9 actual, 4.0 prior
Import Price Index YoY (Oct) -2.2% est., -3.0% actual, -2.1% prior: R+
Export Price Index YoY (Oct) -2.2% actual, -1.6% prior
Retail Sales Control Group MoM (Oct) 0.3% est., 0.3% actual, -0.1% prior: R-
Retail Sales Ex Auto & Gas MoM(Oct) 0.3% est., 0.1% actual, -0.1% prior: R-
Industrial Production MoM (Oct) -0.4% est., -0.8% actual, -0.3% prior: R+
NAHB Housing Market Index (Oct) 71 est., 70 actual, 71 prior

 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

Last week’s economic releases were generally in line with recent trends.  October retail sales, as measured by the control group - which is considered the best measure of consumer spending because it removes the more volatile segments of food service, auto and gas sales, etc., rebounded from September having increased 0.3%.  Sustaining its recent softness, industrial production declined more than expected in October, down -0.8%, and the Empire manufacturing survey for November was below forecasts.  Finally, inflation continued to moderate in October. Core CPI and PPI year-over-year were lower than the previous month at 2.3% and 1.6%, respectively.  Year-over-year headline inflation gauges which include food and energy costs were little changed; CPI was 1.8% while PPI was 1.1%.

Investors continued to hope the US/China trade deal would emerge before December 15 (tariff deadline) last week and thus stocks climbed to new highs.  For the week overall, the S&P 500 Index gained 0.9% and the Dow Jones Industrial Average increased 1.2%.  Rebounding from the prior week, real estate and utilities along with health care led the advance while retailers, banks and energy companies declined.  International markets were mixed, as developed foreign markets were flat while emerging markets fell -1.3%.  Reversing the action from the prior week, bond yields declined last week, which sent bond prices higher.  For the week, the Barclay’s US Aggregate Index and US corporate bonds rose more than 0.5% while 10-year municipals bonds gained 0.3%.  High yield bonds ended relatively unchanged.

US CPI Urban Consumers YoY NSA