Week of November 19 - 23, 2018

Maureen Kelliher, CFA

Maureen Kelliher, CFA

November 28, 2018

Weekly Economic Review

Weekly Macro Updates

Initial Jobless Claims (Nov 17) 215 est., 224 actual, 221 prior
Continuing Claims (Nov 10 ) 1653 est., 1668 actual, 1670 prior
NAHB Housing Market Index (Nov) 67 est., 60 actual, 68 prior
Housing Starts MoM (Oct) 2.2% est., 1.5% actual, -5.5% prior: R-
Building Permits MoM (Oct) -0.8% est., -0.6% actual, 1.7% prior: R+
Existing Home Sales MoM (Oct) 1.0% est., 1.4% actual, -3.4% prior
S&P CoreLogic CS 20-City Price YoY (Sep) 5.20% est., 5.15% actual, 5.53% prior
Durable Goods Orders Ex Transportation (Oct P) 0.4% est., 0.1% actual, -0.6% prior: R-
Capital Goods Orders Nondefense Ex Air (Oct P) 0.2% est., 0.0% actual, -0.5% prior: R-
Leading Economic Index (Oct) 0.1% est., 0.1% actual, 0.6% prior: R+
Markit U.S. Manufacturing PMI (Nov P) 55.7 est., 55.4 actual, 55.7 prior
Market U.S. Services PMI (Nov P) 55.0 est., 54.4 actual, 54.8 prior
Chicago Fed National Activity Index (Oct) 0.18 est., 0.24 actual, 0.14 prior: R-
Conference Board Consumer Confidence (Nov) 135.7 est., 135.7 actual, 137.9

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

Capital Market Implications

There were a number of economic releases during the Thanksgiving holiday shortened week.  Of note, reports for the embattled housing market were announced.  With limited inventory and higher mortgage rates continuing to take their toll on the industry, homebuilders’ sentiment fell in November.  Housing starts and building permits were mixed in October while existing home sales rebounded from their September decline.  Overall, however, housing activity remained weak and recent home price increases were the slowest since 2016.  On the manufacturing front, October’s durable goods and capital goods orders were flat but the flash PMI report for November was positive.  Also indicating a mixed economy, leading indicators were just barely positive during October due to the pullback in stocks.

Global equity markets suffered during the holiday shortened week, as concerns over slowing global growth persisted.  The Dow Jones Industrial Average plunged -4.4% and the S&P 500 Index sank -3.8%.  All sectors of the stock market declined last week but, as both energy and technology plummeted more than 5.0%, they represented the lion share of the selloff.  With Iranian sanction waivers fueling supply worries in the face of slowing global demand, energy stocks were hit particularly hard.  International markets were also lower last week, with developed markets off just -1.0% while emerging markets contracted -1.7%.  Last week, as Treasury yields held relatively steady, activity in the bond pits was quiet.  The U.S. Aggregate Bond Index and corporate bonds were flat overall while high yield bonds sold off slightly.  Ten-year municipal bonds managed to rally modestly.