There is no question that for the year, growth has been the spot to be – the YTD delta between growth and value stands just shy of 32%. Since October we’ve been tracking somewhat of a comeback in value and capitalization. Small and mids outperformed large by 13.5% and 9.6% respectively while value is up on growth by 6.2%.
The Baker Hughes rig count gained 12 this week. There are 312 oil and gas rigs operating in the US – down 494 over last year.
Brent Crude Oil gained 8.44% this week closing at $42.78/bbl
WTI Crude Oil gained 8.05% this week to close at $40.13/bbl
Heating Oil gained 5.39% this week closing at $1.20/gallon
Natural Gas gained 3.70% this week closing at $2.99 per million BTUs
Unleaded Gas gained 3.78% this week closing at $1.13/gallon
Metals Complex
Gold lost 3.36% this week closing at $1886.20/oz
Silver lost 3.46% on the week closing at $24.77/oz
Palladium lost 6.81% this week closing at $2329.70/oz
Platinum lost 0.38% this week closing at $896.00/oz
Copper gained 0.76% this week closing at $3.18/lb
Employment Picture
Weekly Unemployment Claims – Released Thursday 11/19/2020 – Initial jobless claims for the week ending November 14th increased 31k to 742k. The 4-week moving average was 742k, a decrease of 13.75k.
Job Openings & Labor Turnover Survey JOLTS – Released 11/10/2020 – The U.S. Bureau of Labor Statistics reported the number and rate of job openings were little changed at 6.4 million on the last business day of September. Over the month, hires were unchanged at 5.9 million and separations were little changed at 4.7 million. Within separations, the quits rate was little changed at 2.1%. The layoffs and discharges rates decreased to 0.9%.
October Jobs Report–BLS Summary– Released 11/6/2020 – The US Economygained 638k nonfarm jobs in October and the Unemployment rate declined to 6.9%. Average hourly earnings increased 4 cents to $29.50. Hiring highlights include Leisure and Hospitality +271k, Retail Trade +104k, Professional and Business Services +208k.
Average hourly earnings increased 4 cents to $29.50.
U3 unemployment rate declined to 6.9%. U6 unemployment rate declined to 12.1%.
The labor force participation rate increased 0.3% to 61.7%.
Average workweek was unchanged at 34.8 hours.
Employment Cost Index – Released 10/30/2020 – Compensation costs for civilian workers increased 0.5% for the 3-month period ending in June 2020. The 12 month period ending in September 2020 saw compensation costs increase by 2.4%. The 12 month period ending September 2019 increased 2.8%. Wages and salaries increased 2.5 percent over the year and increased 2.9 percent for the 12-month period ending in September 2019. Benefit costs increased 2.3 percent for the 12-month period ending in September 2020. In September 2019, the increase was also 2.3 percent. This report is published quarterly.
This Week’s Economic Data
Links take you to the data source
Existing Home Sales– Released 11/19/2020 – Existing home sales increased in October making five consecutive months of sales gains. Sales increased 4.3% to a seasonally adjusted rate of 6.85 million in October. Sales are currently up 26.6% from one year ago. Housing inventory sits at 1.42 million units. Down 2.7% over last month. Down 19.8% over last year. Unsold inventory sits at an all-time low 2.5 month supply. The median existing home price for all housing types was $313,000.
Housing Starts– Released 11/18/2020 – New home starts in October were at a seasonally adjusted annual rate of 1.530 million; up 4.9% above September and 14.2% above last October’s rate. Building Permits were at a seasonally adjusted annual rate of 1.545 million, unchanged compared to September and up 2.8% over last year.
Retail Sales – Released 11/17/2020 – U.S. retail sales for October increased 0.3% to $553.3 billion. U.S. retail sales are up 5.7% year/y.
Industrial Production and Capacity Utilization – Released 11/17/2020 – In OctoberIndustrial production increased 1.1%. Total Industrial production is still 5.6% below its pre-pandemic February level. Manufacturing increased 1.0%. The output of utilities increased 3.9%. Total industrial production was 103.2% of its 2012 average which is 5.3% lower in October than a year ago. Total capacity utilization increased 0.8% to 72.8% in October which is 7.0% below its long-run average.
Recent Economic Data
Links take you to the data source
Producer Price Index– Released 11/13/2020 – The Producer Price Index for final demand increased 0.3% in October. PPI less food and energy was unchanged in October.
Consumer Price Index –Released 11/12/2020 – The Consumer Price Index was unchanged in October. Core CPI, which excludes food and energy was also unchanged. The monthly changes left total CPI up 1.2% year-over-year and core CPI up 1.6%.
US Light Vehicle Sales – Released 11/6/2020 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 16.209 million units in October.
Consumer Credit –Released 11/6/2020 – In September, consumer credit increased at a seasonally adjusted rate of 2.25%. Revolving credit decreased at an annual rate of 2.5 percent, while nonrevolving credit increased at an annual rate of 4.0 percent. Total Outstanding consumer credit is currently at $4.161 trillion.
U.S. Trade Balance–Released 11/4/2020 –According to the U.S. Census Bureau of Economic Analysis, the goods and services deficit declined in September by $3.2 billion to $63.9 billion. September exports were $176.4 billion, $4.4 billion more than August exports. September imports were $240.2 billion, $1.2 billion more than August imports. The goods and services deficit increased $38.5 billion or 8.6% year-to-date, from the same period in 2019. Year – over – year exports and imports decreased $329.0 billion or 17.4% and decreased $290.4 billion or 12.4% respectively.
PMI Non-Manufacturing Index (ISM Services)– Released 11/4/2020 – Economic activity in the non-manufacturing sector grew in October for the fifth consecutive month. ISM Non-Manufacturing registered 56.6 percent, which is 1.2 percentage points below the adjusted September reading of 57.8 percent.
PMI Manufacturing ISM Index – Released 11/2/2020 – October PMI increased 3.9% to 59.3% from September’s reading of 55.4%. The New Orders Index was up 7.7% from September’s reading of 60.2% to 67.9%. The Production Index registered 63.0%, up 2.0%.
U.S. Construction Spending– Released 11/2/2020 – Construction spending increased 0.3% in September measuring at a seasonally adjusted annual rate of $1,414.0 billion. The September figure is 1.5% above the September 2019 estimate. Private construction spending was 0.9% above the revised August estimate at $1,074.9 billion. Public construction spending was 1.7% below the revised August estimate at $344.8 billion.
Personal Income– Released 10/30/2020 – Personal income increased $170.3 billion or 0.9 percent in September according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $150.3 billion or 0.9 percent and personal consumption expenditures (PCE) increased $201.4 billion or 1.4 percent.
Chicago PMI– Released 10/30/2020 – Chicago PMI declined to 61.1 points in October following a large increase in September. This marks four consecutive months above the 50-mark following a full year under it. New Orders was the only category to increase in October while Production had the largest decline of the five main categories.
Advance Estimate of 3rd Quarter 2020 GDP – Released 10/29/2020 – Real gross domestic product (GDP) increased at an annual rate of 33.1 percent in the third quarter of 2020, according to the advance estimate released by the Bureau of Economic Analysis. This increase follows a 31.4% decline in GDP in the second quarter of 2020. The GDP advance estimate is based on source data that are incomplete or subject to further revision. The increase in real GDP reflected increases in personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, and residential fixed investment that were partly offset by decreases in federal government spending (reflecting fewer fees paid to administer the Paycheck Protection Program loans), state and local government spending, and imports.
Consumer Confidence– Released 10/27/2020 – The Consumer confidence index declined 0.4% in October following an increase in September. The Index now shows a reading of 100.9, down from 101.3 in September.
Durable Goods– Released 10/27/2020 – New orders for manufactured durable goods in September increased for the fifth consecutive month up $4.3 billion or 1.9% to $237.1 billion. Transportation equipment led the increase rising $3 billion or 4.1% to $76.8 billion.
New Residential Sales– Released 10/26/2020 – Sales of new single-family homes declined 3.5% to 959k, seasonally adjusted, in September. The median sales price of new homes sold in September was $326,800 with an average sales price of $405,400. At the end of September, the seasonally adjusted estimate of new homes for sale was 284k. This represents a supply of 3.6 months at the current sales rate.
Next week we get data on New Residential Sales, Durable Goods, Consumer Confidence, Personal Income, and the Second Estimate of 3rd Quarter GDP,
Is this the Start of the Rotation?
There is no question that for the year, growth has been the spot to be – the YTD delta between growth and value stands just shy of 32%. Since October we’ve been tracking somewhat of a comeback in value and capitalization. Small and mids outperformed large by 13.5% and 9.6% respectively while value is up on growth by 6.2%.
Table of Contents
Fixed Income
11/5/20 FOMC Statement FOMC Minutes Credit, Liquidity and Balance Sheet Federal Reserve Dot Plots US Debt Measurement US Corporate Debt Tops 7 Trillion Treasury.gov yields FOMC Policy Normalization Statement Longer Run Goals August 2020
Global Bond Yields
Daily US Treasury Yields
Foreign Exchange Market
Energy Complex
The Baker Hughes rig count gained 12 this week. There are 312 oil and gas rigs operating in the US – down 494 over last year.
Metals Complex
Employment Picture
Weekly Unemployment Claims – Released Thursday 11/19/2020 – Initial jobless claims for the week ending November 14th increased 31k to 742k. The 4-week moving average was 742k, a decrease of 13.75k.
Job Openings & Labor Turnover Survey JOLTS – Released 11/10/2020 – The U.S. Bureau of Labor Statistics reported the number and rate of job openings were little changed at 6.4 million on the last business day of September. Over the month, hires were unchanged at 5.9 million and separations were little changed at 4.7 million. Within separations, the quits rate was little changed at 2.1%. The layoffs and discharges rates decreased to 0.9%.
October Jobs Report – BLS Summary – Released 11/6/2020 – The US Economy gained 638k nonfarm jobs in October and the Unemployment rate declined to 6.9%. Average hourly earnings increased 4 cents to $29.50. Hiring highlights include Leisure and Hospitality +271k, Retail Trade +104k, Professional and Business Services +208k.
Employment Cost Index – Released 10/30/2020 – Compensation costs for civilian workers increased 0.5% for the 3-month period ending in June 2020. The 12 month period ending in September 2020 saw compensation costs increase by 2.4%. The 12 month period ending September 2019 increased 2.8%. Wages and salaries increased 2.5 percent over the year and increased 2.9 percent for the 12-month period ending in September 2019. Benefit costs increased 2.3 percent for the 12-month period ending in September 2020. In September 2019, the increase was also 2.3 percent. This report is published quarterly.
This Week’s Economic Data
Links take you to the data source
Existing Home Sales – Released 11/19/2020 – Existing home sales increased in October making five consecutive months of sales gains. Sales increased 4.3% to a seasonally adjusted rate of 6.85 million in October. Sales are currently up 26.6% from one year ago. Housing inventory sits at 1.42 million units. Down 2.7% over last month. Down 19.8% over last year. Unsold inventory sits at an all-time low 2.5 month supply. The median existing home price for all housing types was $313,000.
Housing Starts – Released 11/18/2020 – New home starts in October were at a seasonally adjusted annual rate of 1.530 million; up 4.9% above September and 14.2% above last October’s rate. Building Permits were at a seasonally adjusted annual rate of 1.545 million, unchanged compared to September and up 2.8% over last year.
Retail Sales – Released 11/17/2020 – U.S. retail sales for October increased 0.3% to $553.3 billion. U.S. retail sales are up 5.7% year/y.
Industrial Production and Capacity Utilization – Released 11/17/2020 – In October Industrial production increased 1.1%. Total Industrial production is still 5.6% below its pre-pandemic February level. Manufacturing increased 1.0%. The output of utilities increased 3.9%. Total industrial production was 103.2% of its 2012 average which is 5.3% lower in October than a year ago. Total capacity utilization increased 0.8% to 72.8% in October which is 7.0% below its long-run average.
Recent Economic Data
Links take you to the data source
Producer Price Index – Released 11/13/2020 – The Producer Price Index for final demand increased 0.3% in October. PPI less food and energy was unchanged in October.
Consumer Price Index – Released 11/12/2020 – The Consumer Price Index was unchanged in October. Core CPI, which excludes food and energy was also unchanged. The monthly changes left total CPI up 1.2% year-over-year and core CPI up 1.6%.
US Light Vehicle Sales – Released 11/6/2020 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 16.209 million units in October.
Consumer Credit – Released 11/6/2020 – In September, consumer credit increased at a seasonally adjusted rate of 2.25%. Revolving credit decreased at an annual rate of 2.5 percent, while nonrevolving credit increased at an annual rate of 4.0 percent. Total Outstanding consumer credit is currently at $4.161 trillion.
U.S. Trade Balance – Released 11/4/2020 – According to the U.S. Census Bureau of Economic Analysis, the goods and services deficit declined in September by $3.2 billion to $63.9 billion. September exports were $176.4 billion, $4.4 billion more than August exports. September imports were $240.2 billion, $1.2 billion more than August imports. The goods and services deficit increased $38.5 billion or 8.6% year-to-date, from the same period in 2019. Year – over – year exports and imports decreased $329.0 billion or 17.4% and decreased $290.4 billion or 12.4% respectively.
PMI Non-Manufacturing Index (ISM Services) – Released 11/4/2020 – Economic activity in the non-manufacturing sector grew in October for the fifth consecutive month. ISM Non-Manufacturing registered 56.6 percent, which is 1.2 percentage points below the adjusted September reading of 57.8 percent.
PMI Manufacturing ISM Index – Released 11/2/2020 – October PMI increased 3.9% to 59.3% from September’s reading of 55.4%. The New Orders Index was up 7.7% from September’s reading of 60.2% to 67.9%. The Production Index registered 63.0%, up 2.0%.
U.S. Construction Spending – Released 11/2/2020 – Construction spending increased 0.3% in September measuring at a seasonally adjusted annual rate of $1,414.0 billion. The September figure is 1.5% above the September 2019 estimate. Private construction spending was 0.9% above the revised August estimate at $1,074.9 billion. Public construction spending was 1.7% below the revised August estimate at $344.8 billion.
Personal Income – Released 10/30/2020 – Personal income increased $170.3 billion or 0.9 percent in September according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $150.3 billion or 0.9 percent and personal consumption expenditures (PCE) increased $201.4 billion or 1.4 percent.
Chicago PMI – Released 10/30/2020 – Chicago PMI declined to 61.1 points in October following a large increase in September. This marks four consecutive months above the 50-mark following a full year under it. New Orders was the only category to increase in October while Production had the largest decline of the five main categories.
Advance Estimate of 3rd Quarter 2020 GDP – Released 10/29/2020 – Real gross domestic product (GDP) increased at an annual rate of 33.1 percent in the third quarter of 2020, according to the advance estimate released by the Bureau of Economic Analysis. This increase follows a 31.4% decline in GDP in the second quarter of 2020. The GDP advance estimate is based on source data that are incomplete or subject to further revision. The increase in real GDP reflected increases in personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, and residential fixed investment that were partly offset by decreases in federal government spending (reflecting fewer fees paid to administer the Paycheck Protection Program loans), state and local government spending, and imports.
Consumer Confidence – Released 10/27/2020 – The Consumer confidence index declined 0.4% in October following an increase in September. The Index now shows a reading of 100.9, down from 101.3 in September.
Durable Goods – Released 10/27/2020 – New orders for manufactured durable goods in September increased for the fifth consecutive month up $4.3 billion or 1.9% to $237.1 billion. Transportation equipment led the increase rising $3 billion or 4.1% to $76.8 billion.
New Residential Sales – Released 10/26/2020 – Sales of new single-family homes declined 3.5% to 959k, seasonally adjusted, in September. The median sales price of new homes sold in September was $326,800 with an average sales price of $405,400. At the end of September, the seasonally adjusted estimate of new homes for sale was 284k. This represents a supply of 3.6 months at the current sales rate.
Next week we get data on New Residential Sales, Durable Goods, Consumer Confidence, Personal Income, and the Second Estimate of 3rd Quarter GDP,
Data Sources:
Bureau of Economic Analysis (BEA)
Congressional Budget Office (CBO)
U.S. Bureau of Labor Statistics (BLS)
Federal Reserve Economic Data (FRED Charts)
CME Fed Watch
U.S. Treasury – Yields
U.S. Census Bureau
Institute for Supply Management (ISM)
Weekly DOL Employment Data
BLS Monthly Jobs Report
JOLTS
US Energy Admin (EIA)
BLS Consumer Price Index CPI
BLS Producer Price Index PPI
Atlanta Fed GDPNOW
NY Fed Nowcast GDP
US Census Bureau Housing Starts
Consumer Credit
USCB Retail Sales
Construction Spending
Federal Reserve Dot Plots
NY Empire Index
Philadelphia Federal Reserve
P/E Ratio Data -Yardeni Research
Technical Analysis Info:
StockCharts.com – Financial Charts
Exponential vs Simple moving average
Other Links:
1973 Arab Oil Embargo
Hunt Brothers Silver
Long-Term Capital bailout
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