The Markets
The major benchmark indexes listed here remained relatively stable
for the holiday-shortened week. Mixed economic data, the Thanksgiving
holiday, plus heavy consumer shopping may have slowed trading. The Dow
lost about 25 points, while the S&P 500 gained almost 23 points. The
Nasdaq and Russell 2000 posted gains week-on-week, while the Global Dow
dropped a little over 18 points.
The price of gold (COMEX) continued to fall, selling at $1,056.10 by
late Friday afternoon compared to $1,077.30 a week earlier. Crude oil
(WTI) prices remained virtually the same, selling at $41.77 per barrel
by week's end. The national average retail regular gasoline price
decreased to $2.094 per gallon on November 23, 2015, $0.084 below the
previous week's price of $2.178 per gallon, and $0.727 below a year ago.
Last Week's Headlines
- The "second" estimate of the gross domestic product showed the U.S.
economy advanced 2.1% in the third quarter of 2015, up from an initial
estimate of 1.5%. The second quarter GDP increased 3.9%. According to
the Bureau of Economic Analysis, the revised gain in the third quarter
is reflective of increases in personal consumption expenditures,
nonresidential fixed investment, state and local government spending,
residential fixed investment, and exports. Imports, which are a
subtraction in the calculation of GDP, increased.
- On the heels of the GDP report came another important inflation
indicator relied upon by the Fed--the core personal consumption
expenditures (PCE) reading. And the latest figures from the Bureau of
Economic Analysis show very little upward inflationary movement, as the
PCE increased $15.2 billion, or 0.1%, in October. This follows a 0.1%
PCE increase in September. Overall, personal income increased $68.1
billion, or 0.4%, while disposable personal income also increased 0.4%
at $56.8 billion. Despite increases in disposable income, consumers
aren't spending commensurate with the added income, keeping inflationary
trends stagnant. Unless November's numbers reflect otherwise, October's
results do not readily support an interest rate hike in December.
- New orders for durable goods placed with U.S. manufacturers are an
indication of how busy factories will be in the coming months. According
to the latest advance report from the Census Bureau, new orders for
manufactured durable goods in October increased $6.9 billion, or 3.0%,
to $239.0 billion. This increase follows a 0.8% revised September
decrease.
- However, manufacturing growth in November is slowing, according to
the Markit Flash U.S. Manufacturing Purchasing Managers' Index™ (PMI™).
At 52.6, the index is still above 50, indicating monthly growth, but at a
much slower pace, as the index for October was 54.1. Survey respondents
indicated that growth in new orders is the slowest it's been in over
two years, citing cyclical slowdown in demand patterns and ongoing
weakness in export sales.
- Home prices for September were up, according to the latest
S&P/Case-Shiller Home Price Indices. The National Home Price Index,
covering the entire nation, recorded a year-over-year gain with a 4.9%
annual increase in September compared to a 4.6% increase in August.
Before seasonal adjustment, the National Index posted a gain of 0.2% in
September over August.
- The inventory of existing homes for sale is down, resulting in a
drop in the sale of single-family homes, townhomes, condominiums, and
co-ops for October, according to the latest figures from the National
Association of Realtors®. Total existing home sales fell 3.4% to a
seasonally adjusted annual rate of 5.36 million in October from 5.55
million in September. Total housing inventory at the end of October
decreased 2.3% to 2.14 million existing homes available for sale, and is
now 4.5% lower than a year ago (2.24 million).
- According to the Census Bureau, sales
of new single-family homes in October were at a seasonally adjusted
annual rate of 495,000--10.7% above the revised September rate of
447,000, and 4.9% above October 2014. The median sales price of new
houses sold in October was $281,500; the average sales price was
$366,000 with an estimated 226,000 new homes for sale at the end of
October (a supply of about 5.5 months).
- The Conference Board Consumer
Confidence Index®, which had decreased moderately in October, declined
further in November. The index now stands at 90.4, down from 99.1 in
October. The decline was attributable to consumers' less favorable view
of the job market and business conditions.
- Another indicator of consumer
sentiment in the economy, the University of Michigan's Surveys of
Consumers Index of Consumer Sentiment, came in at 91.3 for November,
somewhat ahead of October's 90.0 reading. Consumer sentiment waned
toward the latter part of November however, possibly reflective of the
Paris attacks and further terrorist threats.
- In the week ended November 21, there
were 260,000 initial claims for unemployment insurance, a decrease of
12,000 from the prior week's revised level. The advance seasonally
adjusted insured unemployment rate was unchanged at 1.6% for the week
ended November 14, while the advance number for continuing unemployment
insurance claims was 2,207,000, an increase of 34,000 from the previous
week's revised level.
Eye on the Week Ahead
This week brings reports from the manufacturing and non-manufacturing
sectors. November's employment data is highlighted at the end of the
week, as is the latest report on international trade.
Data sources: News items are based
on reports from multiple commonly available international news sources
(i.e. wire services) and are independently verified when necessary with
secondary sources such as government agencies, corporate press releases,
or trade organizations. Market data: Based on data reported in WSJ
Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S.
Energy Information Administration/Bloomberg.com Market Data (oil spot
price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX
Street (currency exchange rates). All information is based on sources
deemed reliable, but no warranty or guarantee is made as to its accuracy
or completeness. Neither the information nor any opinion
expressed herein constitutes a solicitation for the purchase or sale of
any securities, and should not be relied on as financial advice. Past
performance is no guarantee of future results. All investing involves
risk, including the potential loss of principal, and there can be no
guarantee that any investing strategy will be successful.
The Dow Jones Industrial Average (DJIA) is a price-weighted index
composed of 30 widely traded blue-chip U.S. common stocks. The S&P
500 is a market-cap weighted index composed of the common stocks of 500
leading companies in leading industries of the U.S. economy. The NASDAQ
Composite Index is a market-value weighted index of all common stocks
listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap
weighted index composed of 2,000 U.S. small-cap common stocks. The
Global Dow is an equally weighted index of 150 widely traded blue-chip
common stocks worldwide. Market indices listed are unmanaged and are not
available for direct investment.
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