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Weekly Economic Update - 11.20.17

YEARLY INFLATION BACK AT 2.0%

Consumer costs ticked up just 0.1% in October, according to the Department of Labor. The marginal monthly gain left the annualized increase in the headline Consumer Price Index at 2.0%, down from 2.2% a month earlier. The core CPI has risen 1.8% in 12 months. Gasoline prices influenced the October headline number: they fell 2.4% in October after a 13.1% September leap.1

  

RETAIL SALES BEAT EXPECTATIONS

Analysts surveyed by MarketWatch thought retail sales would be flat for October after their huge surge in September. That was not so. They surprised to the upside with a gain of 0.2%. Minus auto buying, the advance was 0.1%.2

  

DEVELOPERS PICK UP THE PACE AS FALL BEGINS

Newly released Census Bureau data shows a 13.7% monthly increase in housing starts in October as well as a 5.9% rise for building permits. Single-family home construction strengthened 5.3% last month.3

  

NASDAQ OUTPERFORMS DOW, S&P 500

After a volatile five days, the Nasdaq Composite closed 0.47% higher on November 17 than it had on November 10: 6,782.79. The trading week was tougher for the Dow Jones Industrial Average, which declined 0.27% to 23,358.24, and the S&P 500, which lost 0.13% on the way to a Friday settlement of 2,578.85. The Russell 2000 added 1.19% to wrap up the week at 1,492.82. Wall Street’s hottest index over the past year has been the PHLX Semiconductor – as of Friday, it had gained 49.77% in the past 52 weeks.4

      

THIS WEEK: Monday, Agilent Technologies and Urban Outfitters reveal Q3 results. On Tuesday, investors consider earnings announcements from Campbell Soup, Hormel Foods, and Lowe’s, plus the latest new home sales report from the National Association of Realtors; also, Federal Reserve chair Janet Yellen stops by New York University for a moderated Q&A session. The Fed releases the minutes from its November policy meeting on Wednesday; Wall Street will also keep an eye out for the final November consumer sentiment index from the University of Michigan, a new report on durable goods orders, and earnings from Deere & Co. On Thursday, U.S. financial markets are closed for Thanksgiving. Friday, Wall Street reopens for a shortened trading session ending at 1:00pm EST.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+18.19

+23.56

+17.11

+7.73

NASDAQ

+26.00

+27.16

+27.55

+15.72

S&P 500

+15.19

+17.91

+17.93

+7.68

REAL YIELD

11/17 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.49%

0.42%

-0.81%

1.80%

 

 


Sources: wsj.com, bigcharts.com, treasury.gov - 11/17/174,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (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. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

Citations.

1 - cnbc.com/2017/11/15/us-consumer-price-index-oct-2017.html [11/15/17]

2 - marketwatch.com/economy-politics/calendars/economic [11/17/17]

3 - builderonline.com/money/economics/housing-starts-permits-jump-in-october_o [11/17/17]

4 - markets.wsj.com/us [11/17/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F17%2F16&x=0&y=0 [11/17/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F17%2F16&x=0&y=0 [11/17/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F17%2F16&x=0&y=0 [11/17/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F16%2F12&x=0&y=0 [11/17/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F16%2F12&x=0&y=0 [11/17/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F16%2F12&x=0&y=0 [11/17/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F16%2F07&x=0&y=0 [11/17/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F16%2F07&x=0&y=0 [11/17/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F16%2F07&x=0&y=0 [11/17/17]

6 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/17/17]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/17/17]

Weekly Economic Update - 11.13.17

CONSUMER SENTIMENT INDEX DECLINES

The University of Michigan’s monthly gauge of U.S. household sentiment fell to 97.8 in its initial November edition; analysts polled by Bloomberg estimated it would tick up to 100.8. While the 2.9-point dip from its final October level was the largest drop in a year, the index remained near a 13-year peak. Sixty percent of the consumers surveyed felt that stocks would rise in 2018.1

  

Q3 Earnings: A LOOK AT THE SCORECARD

As of Friday, 87% of S&P 500 companies had reported third-quarter earnings. An analysis from Zacks Investment Research reveals that 73% have topped earnings forecasts; 67% have surpassed revenue estimates. So far, the earnings growth rate for S&P 500 firms in the third quarter is 6.8%, with revenues rising 6.2%. Zacks expects total earnings for the quarter to be 6.2% higher than Q3 2016, with year-over-year income growth at 5.7%.2

  

OIL CAPS OFF A STRONG WEEK

Light sweet crude rose to its highest level in 28 months last week before settling slightly lower: $56.67 was the NYMEX price at Friday’s NYSE closing bell. At that time, WTI crude was up 1.8% from its November 3 close.3

  

A SLIGHT PULLBACK ON WALL STREET

Uncertainty about the potential for tax code reform led to some weakness in stocks over the past five trading days. The S&P 500 fell 0.21% for the week to 2,582.30; the Nasdaq Composite retreated 0.20% to 6,750.94. Blue chips took a deeper loss: the Dow Jones Industrial Average declined 0.50% to 23,422.21. The week was much rougher for the Russell 2000, which gave back 1.31% on the way to a Friday settlement of 1,475.27. The CBOE VIX ended the week at 11.29, rising 23.52% in five days.4

      

THIS WEEK: Monday, Tyson Foods presents Q3 results. On Tuesday, the October Producer Price Index arrives as well as earnings from Aramark and Beazer Homes. Wall Street looks at last month’s retail sales figures and Consumer Price Index on Wednesday, plus earnings from Cisco, L Brands, NetEase, and Target. Thursday, reports on initial jobless claims and October industrial output complement earnings from Best Buy, Gap, Viacom, and Walmart. Friday, the Census Bureau issues a report on October housing starts and building permits.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+18.52

+24.53

+16.55

+7.96

NASDAQ

+25.41

+29.61

+26.48

+15.69

S&P 500

+15.34

+19.14

+17.43

+7.76

REAL YIELD

11/10 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.52%

0.27%

-0.83%

1.82%

 

 


Sources: wsj.com, bigcharts.com, treasury.gov - 11/10/174,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (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. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

Citations.

1 - bloomberg.com/news/articles/2017-11-10/u-s-consumer-sentiment-unexpectedly-drops-amid-price-concerns [11/10/17]

2 - nasdaq.com/article/7-retail-stocks-to-steal-the-show-with-q3-earnings-beat-cm875644 [11/10/17]

3 - marketwatch.com/story/oil-steadies-after-climb-toward-2-year-highs-2017-11-10 [11/10/17]

4 - markets.wsj.com/us [11/10/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F10%2F16&x=0&y=0 [11/10/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F10%2F16&x=0&y=0 [11/10/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F10%2F16&x=0&y=0 [11/10/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F9%2F12&x=0&y=0 [11/10/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F9%2F12&x=0&y=0 [11/10/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F9%2F12&x=0&y=0 [11/10/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F9%2F07&x=0&y=0 [11/10/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F9%2F07&x=0&y=0 [11/10/17]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F9%2F07&x=0&y=0 [11/10/17]

6 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/10/17]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/10/17]

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