Week of November 18 - 22, 2019

Maureen Kelliher, CFA

Maureen Kelliher, CFA

November 27, 2019

Weekly Economic Review

Weekly Macro Updates

Initial Jobless Claims (Nov 16) 218k est., 227k actual, 227k prior
Continuing Claims (Nov 9) 1683k est., 1695k actual, 1692k prior
Housing Starts MoM (Oct) 5.1% est., 3.8% actual, -7.9% prior: R+
Building Permits MoM (Oct) -0.4% est., 5.0% actual, -2.4% prior: R+
Existing Home Sales MoM (Oct) 2.0% est., 1.9% actual, -2.5% prior: R-
FHFA House Price Purchase Index QoQ (3Q) 1.1% actual, 1.1% prior
Philadelphia Federal Reserve Business Outlook (Nov) 6.0 est., 10.1 actual, 5.6 prior
Leading Economic Index (Oct) -0.1% est., -0.1% actual, -0.2% prior: R-
Markit US Manufacturing PMI (Nov P) 51.4 est., 52.2 actual, 51.3 prior
Markit US Service PMI (Nov P) 51.0 est., 51.6 actual, 50.6 prior
Chicago Federal Reserve National Activity Index (Oct) -0.20% est., -0.71% actual, -0.45% prior
Kansas City Federal Reserve Manufacturing Activity (Nov) -2 est., -3 actual, -3 prior
Dallas Federal Reserve Manufacturing Activity (Nov) -3.8% est., -1.3% actual, -5.1% prior
Richmond Federal Reserve Manufacturing Index (Nov) 5 est., -1 actual, 8 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

Supported by lower mortgage rates, better home pricing and a healthy consumer, the housing market continued to improve last month.  October’s building permits rose to their highest level since 2007 and October’s housing starts were the second strongest this year.  According to the FHFA House Price Purchase Index, home prices have continued to increase this year but at a more moderate pace.  Indeed, in some of the hotter housing markets (mainly on the west coast), along with rents, home prices have fallen.  Finally, although manufacturing has shown some improvement, the regional Federal Reserve manufacturing surveys for October and November remained soft.

With few developments on the US-China trade front and third-quarter results mixed from a number of retailers, investors decided to take profits last week, which sent stocks lower for the first time in more than a month.  The S&P 500 Index lost -0.3% and the Dow Jones Industrial Average fell -0.4%.  Health care and banks stocks managed to climb last week, while real estate and material companies were the largest losers, off more than- 1.0%.  International markets were also weak, as developed foreign markets shed -0.6% and emerging markets ended the week flat.  Interest rates continued to trend lower last week which lifted bond prices again.  For the week, the Barclay’s US Aggregate Index gained 0.3% while US corporate bonds and 10-year municipals bonds rose approximately 0.4%.  High yield bonds were the week’s only laggards, down -0.2%.