The only thing that wasn’t on sale this Black Friday was the stock market. The S&P closed just slightly off the All-Time High set on Wednesday before the holiday. The forward P/E on the SPX is currently 17.8.
Gains were solid across the board with new highs on the Dow, Nasdaq, and SPX. Even the Russell 2000 climbed to its best level since October 2018. Energy was the only negative sector this week as crude oil fell more than 5% Friday.
In the week ahead ISM Manufacturing and Non-manufacturing come out Monday and Tuesday. There is an Opec meeting Thursday and the Payroll numbers come out Friday morning.
The Baker Hughes rig count lost 1 this week. There are 802 oil and gas rigs operating in the US – Down 274 over last year.
Brent Crude Oil lost 4.57% this week closing at $60.49/bbl
WTI Crude Oil lost 4.50% this week to close at $55.17/bbl
Heating Oil lost 2.58% this week closing at $1.88/gallon
Natural Gas lost 15.83% this week closing at $2.28 per million BTUs
Unleaded Gas lost 4.72% this week closing at $1.59/gallon
Metals Complex
Gold gained 0.62% this week closing at $1472.70/oz
Silver gained 0.62% on the week closing at $17.11/oz
Palladium gained 3.83% this week closing at $1810.10/oz
Platinum gained 0.87% this week closing at $900.40/oz
Copper gained 0.51% this week closing at $2.66/lb
Employment Picture
Weekly Unemployment Claims – Released Thursday 11/28/19 – In the week ending November 23th, initial claims were 213,000, a decrease of 15,000 from the previous week’s revised level. The 4-week moving average was 219,750, a decrease of 1,500 from the previous week’s revised average.
Job Openings & Labor Turnover Survey JOLTS – Released 11/5/19 – The U.S. Bureau of Labor Statistics reported the number of job openings declined slightly from 7.1 million to 7.0 million on the last business day of September. Over the month, hires and separations were little changed at 5.9 million and 5.8 million, respectively. Within separations, the quits rate was little changed at 2.3%. The layoffs and discharges rate was little changed at 1.3%.
October Jobs Report – BLS Summary– Released 11/1/19 – The US Economyadded 128k nonfarm jobs in October and the Unemployment rate was little changed at 3.6%. Average hourly earnings increased by 6 cents. Hiring highlights include Food Services and Drinking Places +48k, Social Assistance +20k, Financial Activities +16k, and Professional and Business Services +22k.
Average hourly earnings increased by 6 cents in October, y/y hourly earnings are up 3.0%.
U3 unemployment was little changed at 3.6%. U6 unemployment rate increased 0.1% to 7.0%.
The labor force participation rate was little changed in October at 63.3% (Unchanged year/y).
Average workweek was unchanged at 34.4 hours.
Employment Cost Index – Released 10/31/19 – Compensation costs for civilian workers increased 0.7% for the 3-month period ending in September 2019. The 12 month period ending in September 2019 saw compensation costs increase by 2.8%, same as for the 12 month period ending September 2018. Wages and salaries were up 2.9% for the 12-month period ending September 2019, same as for the 12 month period ending September 2018. Benefit costs increased 2.3% for the 12-month period ending September 2019. For private industry workers, compensation costs increased 2.7% year-over-year, versus 2.9% for the 12 months ending September 2018. This report is published quarterly.
This Week’s Economic Data
Links take you to the data source
Chicago PMI– Released 11/27 – Chicago PMI rose 3.1 points in November rising to 46.3, up from 43.2 in October. This increase shows the index rising to a two month high; however, the index is now in contractionary territory for the third consecutive month. Order Backlogs and New Orders saw the largest monthly improvements while Supplier Deliveries showed the largest monthly decline.
Personal Income– Released 11/27 – Personal Income increased less than 0.1% in October according to the BEA. The majority of the increase in October was due to increases in wages and salaries that were partially offset by declines in personal interest income and farm proprietor’s income. Real PCE (the Feds preferred inflation gauge) increased 0.1% in October. Real disposable personal income increased 0.3% in October.
Second Estimate of 3rd Quarter GDP – Released 11/27 – According to the second estimate released by the Bureau of Economic Analysis, Real Gross Domestic Product (Real GDP) increased at an annual rate of 2.1% in the third quarter of 2019. The second estimate is based on data that are more complete than that of the advance estimate which showed an increase of 1.9%. Upward revisions to private inventory investment, nonresidential fixed investment, and personal consumption expenditures (PCE) were partially offset by a downward revision to state and local government spending. The third-quarter increase in real GDP observed positive contributions from personal consumption expenditures (PCE), federal gov’t spending, state and local gov’t spending, and residential fixed investment that were partly offset by negative contributions from private inventory investment, nonresidential fixed investment, and imports.
Durable Goods– Released 11/27 – New orders for manufactured durable goods increased $1.5 billion or 0.6% to $248.7 billion in October. The increase in October follows a 1.4% decline in September. 4 of the last 5 months have seen gains. Fabricated metal products drove the increase; up $0.6 billion or 1.8%.
Consumer Confidence– Released 11/26 – The Consumer confidence index declined in November following a slight decline in October. The Index now shows a reading of 125.5 down from 126.1 in October. Expectations overall still remain strong and consumers remain confident and willing to spend which should support solid spending this holiday season.
New Residential Sales– Released 11/26 – Sales of new single-family homes declined 0.7% to 733k, seasonally adjusted, in October. The median sales price of new homes sold in October was $316.7k with an average sales price of $383.3k. At the end of October the seasonally adjusted estimate of new homes for sale was 322k. This represents a supply of 5.3 months at the current sales rate.
Recent Economic Data
Links take you to the data source
Existing Home Sales– Released 11/21 – Existing home sales rose in October. Sales increased 1.9% to a seasonally adjusted rate of 5.46 million. Sales are currently up 4.6% from one year ago. Housing inventory declined from 4.1 months of inventory to 3.9 months of unsold inventory and the total housing inventory declined from 1.88 million to 1.77 million. The median sales price for all types of homes was $270,900, up 6.2% year/y.
Housing Starts– Released 11/19 – New home starts in October were at a seasonally adjusted rate of 1.314 million; up 3.8% above September and 8.5% above last October’s rate. Building Permits were at a seasonally adjusted rate of 1.461 million, up 5.0% compared to September and up 14.1% over last year.
Industrial Production and Capacity Utilization – Released 11/15 – Industrial production declined 0.8% in October following a 0.3% decline in September. Manufacturing production declined 0.6%. The manufacturing decline was largely due to a 7.1% drop in the output of motor vehicles which stemmed from a strike at a major manufacturer. Mining production decreased 0.7% and utilities output declined 2.6%. Total capacity utilization decreased 0.8% to 76.7% in October which is 3.1% below its long-run average.
Retail Sales – Released 11/15 – U.S. retail sales for October increased 0.3% to $526.5 billion. U.S. retail sales are up 3.1% year/y.
Producer Price Index– Released 11/14 – The Producer Price Index for final demand increased 0.4% in October. Core PPI was unchanged. Year over year the index for final demand rose 1.5%.
Consumer Price Index –Released 11/13 – The Consumer Price Index gained 0.4% in October. Core CPI, which excludes food and energy increased 0.2%. The monthly changes left total CPI up 1.8% year-over-year and core CPI up 2.3%.
Consumer Credit–Released 11/7 – Consumer credit increased at a seasonally adjusted annual rate of 5.00% in the third quarter. Revolving and nonrevolving credit decreased at annual rates of 2.25% and increased 6.00% respectively. Consumer credit increased at an annual rate of 2.75% in September. Total Outstanding consumer credit is currently at $4.149 trillion.
U.S. Trade Balance–Released 11/5 – According to the U.S. Census Bureau of Economic Analysis, the goods and services deficit declined in September to $52.5 billion. This decline is $2.6 billion lower than the deficit recorded in August. September exports were $206.0 billion, $1.8 billion more than August exports. September imports were $258.4 billion, $4.4 billion less than August imports. The goods and services deficit has increased $24.8 billion or 5.4% year to date. Year to date exports and imports decreased $7.0 billion or 0.4% and increased $17.8 billion or 0.8% respectively.
PMI Non-Manufacturing Index (ISM Services)– Released 11/5 – Economic activity in the non-manufacturing sector grew in October for the 117th consecutive month. ISM Non-Manufacturing registered 54.7 percent, which is 2.1 percentage points above the September reading of 52.6 percent. This represents continued growth in the non-manufacturing sector, at a faster rate.
PMI Manufacturing ISM Index–Released 11/1 – October PMI remains in contraction territory as PMI slightly increased by 0.5% to 48.3% from September’s reading of 47.8%. The New Orders Index was up 1.8% from September’s reading of 47.3% to 48.1%. The Production Index registered 46.2% down 1.1%.
U.S. Construction Spending– Released 11/1 – Construction spending increased by 0.5% in September measuring at a seasonally adjusted annual rate of $1,293.6 billion. The September figure is 2.0% below the September 2018 estimate. Private construction spending was 0.2% above the revised August estimate at $959.9 billion. Public construction spending was 1.5% above the revised August estimate at $331.9 billion.
US Light Vehicle Sales – Released 9/4 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 17.07 million units in August versus a SAAR of 16.82 million units in July.
Next week we get data on Construction Spending, ISM Services, Consumer Credit, the PMI Manufacturing ISM Index, the U.S. Trade Balance, and the November Jobs Report.
Table of Contents
New Highs Again This Thanksgiving Week
The only thing that wasn’t on sale this Black Friday was the stock market. The S&P closed just slightly off the All-Time High set on Wednesday before the holiday. The forward P/E on the SPX is currently 17.8.
Gains were solid across the board with new highs on the Dow, Nasdaq, and SPX. Even the Russell 2000 climbed to its best level since October 2018. Energy was the only negative sector this week as crude oil fell more than 5% Friday.
In the week ahead ISM Manufacturing and Non-manufacturing come out Monday and Tuesday. There is an Opec meeting Thursday and the Payroll numbers come out Friday morning.
Fixed Income
FOMC October Statement Federal Reserve Dot Plots US Debt Measurement US Corporate Debt Tops $6 Trillion Treasury.gov yields
FOMC Policy Normalization Statement
Global Bond Yields
Daily US Treasury Yields
Foreign Exchange Market
Energy Complex
The Baker Hughes rig count lost 1 this week. There are 802 oil and gas rigs operating in the US – Down 274 over last year.
Metals Complex
Employment Picture
Weekly Unemployment Claims – Released Thursday 11/28/19 – In the week ending November 23th, initial claims were 213,000, a decrease of 15,000 from the previous week’s revised level. The 4-week moving average was 219,750, a decrease of 1,500 from the previous week’s revised average.
Job Openings & Labor Turnover Survey JOLTS – Released 11/5/19 – The U.S. Bureau of Labor Statistics reported the number of job openings declined slightly from 7.1 million to 7.0 million on the last business day of September. Over the month, hires and separations were little changed at 5.9 million and 5.8 million, respectively. Within separations, the quits rate was little changed at 2.3%. The layoffs and discharges rate was little changed at 1.3%.
October Jobs Report – BLS Summary – Released 11/1/19 – The US Economy added 128k nonfarm jobs in October and the Unemployment rate was little changed at 3.6%. Average hourly earnings increased by 6 cents. Hiring highlights include Food Services and Drinking Places +48k, Social Assistance +20k, Financial Activities +16k, and Professional and Business Services +22k.
Employment Cost Index – Released 10/31/19 – Compensation costs for civilian workers increased 0.7% for the 3-month period ending in September 2019. The 12 month period ending in September 2019 saw compensation costs increase by 2.8%, same as for the 12 month period ending September 2018. Wages and salaries were up 2.9% for the 12-month period ending September 2019, same as for the 12 month period ending September 2018. Benefit costs increased 2.3% for the 12-month period ending September 2019. For private industry workers, compensation costs increased 2.7% year-over-year, versus 2.9% for the 12 months ending September 2018. This report is published quarterly.
This Week’s Economic Data
Links take you to the data source
Chicago PMI – Released 11/27 – Chicago PMI rose 3.1 points in November rising to 46.3, up from 43.2 in October. This increase shows the index rising to a two month high; however, the index is now in contractionary territory for the third consecutive month. Order Backlogs and New Orders saw the largest monthly improvements while Supplier Deliveries showed the largest monthly decline.
Personal Income – Released 11/27 – Personal Income increased less than 0.1% in October according to the BEA. The majority of the increase in October was due to increases in wages and salaries that were partially offset by declines in personal interest income and farm proprietor’s income. Real PCE (the Feds preferred inflation gauge) increased 0.1% in October. Real disposable personal income increased 0.3% in October.
Second Estimate of 3rd Quarter GDP – Released 11/27 – According to the second estimate released by the Bureau of Economic Analysis, Real Gross Domestic Product (Real GDP) increased at an annual rate of 2.1% in the third quarter of 2019. The second estimate is based on data that are more complete than that of the advance estimate which showed an increase of 1.9%. Upward revisions to private inventory investment, nonresidential fixed investment, and personal consumption expenditures (PCE) were partially offset by a downward revision to state and local government spending. The third-quarter increase in real GDP observed positive contributions from personal consumption expenditures (PCE), federal gov’t spending, state and local gov’t spending, and residential fixed investment that were partly offset by negative contributions from private inventory investment, nonresidential fixed investment, and imports.
Durable Goods – Released 11/27 – New orders for manufactured durable goods increased $1.5 billion or 0.6% to $248.7 billion in October. The increase in October follows a 1.4% decline in September. 4 of the last 5 months have seen gains. Fabricated metal products drove the increase; up $0.6 billion or 1.8%.
Consumer Confidence – Released 11/26 – The Consumer confidence index declined in November following a slight decline in October. The Index now shows a reading of 125.5 down from 126.1 in October. Expectations overall still remain strong and consumers remain confident and willing to spend which should support solid spending this holiday season.
New Residential Sales – Released 11/26 – Sales of new single-family homes declined 0.7% to 733k, seasonally adjusted, in October. The median sales price of new homes sold in October was $316.7k with an average sales price of $383.3k. At the end of October the seasonally adjusted estimate of new homes for sale was 322k. This represents a supply of 5.3 months at the current sales rate.
Recent Economic Data
Links take you to the data source
Existing Home Sales – Released 11/21 – Existing home sales rose in October. Sales increased 1.9% to a seasonally adjusted rate of 5.46 million. Sales are currently up 4.6% from one year ago. Housing inventory declined from 4.1 months of inventory to 3.9 months of unsold inventory and the total housing inventory declined from 1.88 million to 1.77 million. The median sales price for all types of homes was $270,900, up 6.2% year/y.
Housing Starts – Released 11/19 – New home starts in October were at a seasonally adjusted rate of 1.314 million; up 3.8% above September and 8.5% above last October’s rate. Building Permits were at a seasonally adjusted rate of 1.461 million, up 5.0% compared to September and up 14.1% over last year.
Industrial Production and Capacity Utilization – Released 11/15 – Industrial production declined 0.8% in October following a 0.3% decline in September. Manufacturing production declined 0.6%. The manufacturing decline was largely due to a 7.1% drop in the output of motor vehicles which stemmed from a strike at a major manufacturer. Mining production decreased 0.7% and utilities output declined 2.6%. Total capacity utilization decreased 0.8% to 76.7% in October which is 3.1% below its long-run average.
Retail Sales – Released 11/15 – U.S. retail sales for October increased 0.3% to $526.5 billion. U.S. retail sales are up 3.1% year/y.
Producer Price Index – Released 11/14 – The Producer Price Index for final demand increased 0.4% in October. Core PPI was unchanged. Year over year the index for final demand rose 1.5%.
Consumer Price Index – Released 11/13 – The Consumer Price Index gained 0.4% in October. Core CPI, which excludes food and energy increased 0.2%. The monthly changes left total CPI up 1.8% year-over-year and core CPI up 2.3%.
Consumer Credit – Released 11/7 – Consumer credit increased at a seasonally adjusted annual rate of 5.00% in the third quarter. Revolving and nonrevolving credit decreased at annual rates of 2.25% and increased 6.00% respectively. Consumer credit increased at an annual rate of 2.75% in September. Total Outstanding consumer credit is currently at $4.149 trillion.
U.S. Trade Balance – Released 11/5 – According to the U.S. Census Bureau of Economic Analysis, the goods and services deficit declined in September to $52.5 billion. This decline is $2.6 billion lower than the deficit recorded in August. September exports were $206.0 billion, $1.8 billion more than August exports. September imports were $258.4 billion, $4.4 billion less than August imports. The goods and services deficit has increased $24.8 billion or 5.4% year to date. Year to date exports and imports decreased $7.0 billion or 0.4% and increased $17.8 billion or 0.8% respectively.
PMI Non-Manufacturing Index (ISM Services) – Released 11/5 – Economic activity in the non-manufacturing sector grew in October for the 117th consecutive month. ISM Non-Manufacturing registered 54.7 percent, which is 2.1 percentage points above the September reading of 52.6 percent. This represents continued growth in the non-manufacturing sector, at a faster rate.
PMI Manufacturing ISM Index – Released 11/1 – October PMI remains in contraction territory as PMI slightly increased by 0.5% to 48.3% from September’s reading of 47.8%. The New Orders Index was up 1.8% from September’s reading of 47.3% to 48.1%. The Production Index registered 46.2% down 1.1%.
U.S. Construction Spending – Released 11/1 – Construction spending increased by 0.5% in September measuring at a seasonally adjusted annual rate of $1,293.6 billion. The September figure is 2.0% below the September 2018 estimate. Private construction spending was 0.2% above the revised August estimate at $959.9 billion. Public construction spending was 1.5% above the revised August estimate at $331.9 billion.
US Light Vehicle Sales – Released 9/4 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 17.07 million units in August versus a SAAR of 16.82 million units in July.
Next week we get data on Construction Spending, ISM Services, Consumer Credit, the PMI Manufacturing ISM Index, the U.S. Trade Balance, and the November Jobs Report.
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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