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Weekly Market Insights

The Markets (as of market close ​​​​​​November​ ​29​​​​​​​, 2019)

The holiday-shortened week was a good one for investors as they were encouraged by the growing likelihood of "phase one" in the resolution of the trade war between China and the United States. The large caps of the Dow and S&P 500 reached record highs earlier in the week as did the tech stocks of the Nasdaq, although the Dow lost some momentum following turkey day. By the close of the markets on Friday, the Russell 2000 had surged by almost 2.25%, followed by the Nasdaq, which gained over 1.70%. The S&P 500 rose by almost 1.0%, the Dow moved ahead by 0.63%, the Global Dow picked up more than 0.25%.

Oil prices fell again last week, closing at $55.17 per barrel by late Friday afternoon, down from the prior week's price of$57.89. The price of gold (COMEX) inched higher last week, closing at $1,465.60 by late Friday afternoon, up from the prior week's price of $1,462.50. The national average retail regular gasoline price was $2.579 per gallon on November 25, 2019, $0.013 less than the prior week's price but $0.040 more than a year ago.

Market/Index

2018 Close

Prior Week

As of ​11/29

Weekly Change

YTD Change

DJIA

23327.46

27875.62

28051.41

0.63%

​​​20.25%

Nasdaq

6635.28

8518.88

8665.47

1.71%

​​30.60%

S&P 500

2506.85

3110.29

3140.98

​0.99%

​25.30%

Russell 2000

1348.56

1​588.94

1​​588.94

​2.24%

​​20.46%

Global Dow

2736.74

3141.77

3151.08

0.30%

1​5.14%

Fed. Funds target rate

2.25%​–2.50%

1.50%​–1.75%

1.​50%​–1.75%

​0 bps

-​75 bps

10-year Treasuries

2.68%

1.77%

1.77%

0 bps

-​​​​91 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic Headlines

  • The second estimate for the third-quarter gross domestic product saw the economy expand at an annualized rate of 2.1%. The GDP grew at a 2.0% rate in the second quarter. Gross domestic income (the net of income earned and cost incurred in the production of GDP) increased 2.4% in the third quarter, compared with an increase of 0.9% in the second quarter. Compared to the second quarter, personal consumption expenditures fell from 4.6% to 2.9%, nonresidential fixed investment (company expenditures on business-related items) fell at a rate of 2.7%, exports grew from -5.7% to 0.9%, and imports increased from 0.0% to 1.5%. The personal consumption expenditure price index (a measure of consumer prices for goods and services) remained at 1.5% for the third quarter. PCE price index excluding food and energy increased 2.1%. Interestingly, corporate profits increased $4.6 billion in the third quarter, compared with an increase of $75.8 billion in the second quarter.
  • Personal income and disposable (after-tax) personal income slowed in October. Personal income was unchanged from September, while disposable personal income fell 0.1%. Consumer spending advanced 0.3% after climbing 0.2% the previous month. Price inflation remains relatively weak as the personal consumption price index rose 0.2% in October following no increases the previous two months. For the year, consumer prices are up 1.3% — well below the Federal Reserve's target rate of 2.0%.

  • The international goods trade deficit was $66.5 billion in October, down $4.0 billion from $70.5 billion in September. Exports of goods for October were $135.3 billion, $0.9 billion less than September exports. Imports of goods for October were $201.8 billion, $5.0 billion less than September imports. Exports that notably decreased included industrial supplies (-3.0%), automotive vehicles (-2.4%), and consumer goods (-4.0%). Import items that fell included automotive vehicles (-5.9%), consumer goods (-4.8%), and foods, feeds, and beverages (-2.9%).

  • New orders for durable goods bounced back in October, increasing 0.6% following September's 1.4% decrease. Excluding transportation, new orders increased 0.6%. Excluding defense, new orders increased 0.1%. Shipments of manufactured durable goods in October were virtually unchanged following three consecutive monthly decreases. New orders for nondefense capital goods in October increased 3.2% after falling 3.4% the prior month.

  • According to the latest report from the Census Bureau, sales of new single-family homes dropped 0.7% in October but are 31.6% above the October 2018 estimate. The median sales price of new houses sold in October 2019 was $316,700. The average sales price was $383,300. The estimated inventory of new homes for sale represents a supply of 5.3 months.

  • For the week ended November 23, there were 213,000 claims for unemployment insurance, a decrease of 15,000 from the previous week's level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims dropped 0.1 percentage point to 1.1% for the week ended November 16. The advance number of those receiving unemployment insurance benefits during the week ended November 16 was 1,640,000, a decrease of 57,000 from the prior week's level, which was revised up by 2,000. This is the lowest level for insured unemployment since August 4, 1973, when it was 1,633,000.

Eye on the Week Ahead

Following the short Thanksgiving week, November reports on manufacturing, trade, and jobs are available this week. Purchasing managers have not been bullish on manufacturing, although November could prove to be a more positive showing. Employment has been solid for quite some time, and November's results should show more new jobs added.

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.


The Markets (as of market close ​​​​​​November 22, 2019)

The market's run of weekly gains ended last week as each of the benchmark indexes listed here lost value. Once again, trade concerns may have prompted investors to pull back from stocks. News last Wednesday of new demands from both the United States and China may delay completion of "phase one" of the trade deal until after the new year. In addition, China threatened "strong countermeasures" if President Trump signed a bill supporting human rights in Hong Kong, following the passage of the Hong Kong Human Rights and Democracy Act by the Senate. As of last Friday, the president had not signed the bill.

By the close of the week, the large caps of the Dow and S&P 500 each fell by less than 0.5%, while the tech stocks of the Nasdaq dropped a quarter of a percent. The small caps of the Russell 2000 lost the most by week's end, but still only a modest 0.47%.

Oil prices fell slightly last week, closing at $57.89 per barrel by late Friday afternoon, down from the prior week's price of$57.93. The price of gold (COMEX) dropped last week, closing at $1,462.50 by late Friday afternoon, down from the prior week's price of $1,468.70. The national average retail regular gasoline price was $2.592 per gallon on November 18, 2019, $0.023 less than the prior week's price and $0.019 less than a year ago.

Market/Index

2018 Close

Prior Week

As of ​11/22

Weekly Change

YTD Change

DJIA

23327.46

28004.89

27875.62

-0.46%

​​​19.50%

Nasdaq

6635.28

8540.83

8519.88

-0.25%

​​28.40%

S&P 500

2506.85

3120.46

3110.29

​-0.33%

​2​4.07%

Russell 2000

1348.56

1​596.45

1​​588.94

​-0.47%

​​1​7.82%

Global Dow

2736.74

3154.39

3141.77

-0.40%

1​4.80%

Fed. Funds target rate

2.25%​–2.50%

1.50%​–1.75%

1.​50%​–1.75%

​0 bps

-​75 bps

10-year Treasuries

2.68%

1.83%

1.77%

-6 bps

-​​​​91 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic Headlines

  • New home construction should be solid heading into the winter months based on a jump in building permits issued in October. Building permits rose 5.0% last month and 14.1% over last October's rate. Single-family authorizations were up 3.2% over September's annualized figure. Housing starts also climbed 3.8% in October, with single-family home starts up 2.0% over the prior month's total. New home inventory should also get a boost as housing completions soared 10.3% in October over September's rate. Single-family housing completions in October were 4.5% above the September total. Retail sales rose 0.3% in October and are up 3.1% since October 2018. Last month turned out to be a bounce back for retail sales, which fell 0.3% in September. In October, motor vehicle sales rose 0.5%, gasoline sales climbed 1.1%, and nonstore (online) sales surged 0.9%. On the downside, sales at clothing stores fell 1.0% and furniture store sales dropped 0.9%.

  • Sales of existing homes bounced back somewhat in October after a drab September. Sales increased 1.9% last month over the prior month's totals. Overall, existing home sales are up 4.6% from a year ago. The median existing-home price for all housing types in October was $270,900, continuing a downward trend ($272,100 in September) this year, but still ahead of the median sales price from last October ($255,100). Total housing inventory at the end of October sat at 1.77 million units, down approximately 2.7% from September and 4.3% from one year ago. Sales of single-family homes increased 2.1% in October over September. The median single-family home sales price dropped in October to $273,600 from September's $274,400.

  • For the week ended November 16, there were 227,000 claims for unemployment insurance, unchanged from the previous week's level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims remained at 1.2% for the week ended November 9. The advance number of those receiving unemployment insurance benefits during the week ended November 9 was 1,695,000, an increase of 3,000 from the prior week's level, which was revised up by 9,000.  

Eye on the Week Ahead

Thanksgiving week should be a slow one in the market, but it will yield some important economic reports. The international trade in goods report for November is expected to show an expanding trade balance with both imports and exports continuing to decrease. Manufacturing has been a sector in decline. Durable goods orders fell 1.1% in October and may not be much better when November's numbers are revealed this week. The second estimate of the third-quarter gross domestic product is also out this week. The advance estimate had the economy growing at an annualized rate of 1.9% — down from the second quarter's 2.0% increase.

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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