Week of November 25 - 29, 2019

Maureen Kelliher, CFA

Maureen Kelliher, CFA

December 4, 2019

Weekly Economic Review

Weekly Macro Updates

Initial Jobless Claims (Nov 23) 221k est., 213k actual, 228k prior
Continuing Claims (Nov 16) 1691k est., 1640k actual, 1697k prior
S&P CoreLogic CS 20-City YoY (Sep) 2.01% est., 2.10% actual, 2.02% prior
S&P CoreLogic CS US HPI YoY (Sep) 3.25% est., 3.22% actual, 3.11% prior: R-
New Home Sales MoM (Oct) 0.6% est., -0.7% actual, 4.5% prior: R+
Conference Board Consumer Confidence (Nov) 127.0 est., 125.5 actual, 126.1 prior: R+
Conference Board Expectations (Nov) 97.9 actual, 94.5 prior
GDP Annualized QoQ (3Q S) 1.9% est., 2.1% actual, 1.9% prior
ISM Manufacturing (Nov) 49.2 est., 48.1 actual, 48.3 prior
PCE Core Deflator YoY (Oct) 1.7% est., 1.6% actual, 1.7% prior
Personal Income (Oct) 0.3% est., 0.0% actual, 0.3% prior
Real Personal Spending 0.0% est., 0.1% actual, 0.2% prior
Capital Goods Orders Nondefense Ex-Air (Oct P) -0.2% est., 1.2% actual, -0.5% prior: R+
Durable Goods Orders Ex-Transportation (Oct P) 0.1% est., 0.6% actual, -0.4% 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

The factory slump in the US persisted through November, as the ISM new orders index fell to its lowest level since April 2012. There were some glimmers of hope in the survey however as incoming orders and production ticked up last month. Preliminary reports for capital goods and durable goods orders (excluding transportation) in October were also better than expected, suggesting the downturn in the industrial space may be ebbing. Of course, unless there is a resolution to the US-China trade squabble, manufacturing could turn south again. The consumer on the other hand remains solid. Consumer confidence in November was close to its recent high and retail spending during the Thanksgiving weekend was strong, up approximately 4.2% over the same period last year. 

Although markets turned down last Friday, overall the holiday-shortened week was kind to investors as stocks reached new highs. Therefore, for the week, the S&P 500 Index jumped 1.0% and the Dow Jones Industrial Average rose 0.7%. The majority of S&P stock sectors contributed to week’s advance with only the energy sector suffering a loss, off -1.5%. International markets however were less consistent, as developed foreign markets climbed 0.5% while emerging markets slumped -0.8%. Holiday weeks generally experience light bond volumes and last week was no exception. Nonetheless, bond prices held their own and ended the week on a positive note. For the week, the Barclay’s US Aggregate Index gained 0.1%, US corporate bonds rose 0.4% and 10-year municipals bonds increased 0.2%. The week’s top honors went to high yield bonds as they rebounded more than 0.4%.