Despite generally good economic data, U.S. stock indexes ended the week lower. Foreign stock indexes were generally higher with emerging markets stocks having strong gains. The markets fluctuated based on various comments from the Trump administration regarding trade. U.S. and Chinese officials at multiple levels met to discuss trade prior to the G20 summit meeting at the end of the month.
Crude oil ended the week sharply lower at $57.03 a barrel. There has been a sharp increase in production and inventories in the U.S. in anticipation of the Iran sanctions. However, since eight countries were given exemptions, the effect of the sanctions may be much less than anticipated. Keep in mind crude oil was $76 a barrel in early October. OPEC is meeting in December and it is anticipated there will be production cuts.
Most other commodities ended the week higher as the dollar ended the week lower. The 10-year treasury yield ended the week lower at 3.1%.
In the numbers this week:
- The Labor Department reported:
- Consumer prices rose 0.3% in October and were up 2.5% from a year earlier. Excluding volatile food and energy prices were up 0.2% in October and 2.1% form a year earlier.
- Initial jobless claims rose 2,000 in the prior week to a seasonally adjusted 216,000. The four-week moving average of claims rose 1,500 to 215.250.
- The Commerce Department reported that retail sales rose 0.8% in October and 4.6% from a year earlier. The prior two months were revised down by 0.1%. The increase was driven by a 3.5% increase in gasoline sales. Auto sales were especially strong. Excluding volatile gasoline and auto sales, retail sales still rose 0.3%.
- The Energy Information Administration weekly report is here wpsrsummary. Also, the EIA reported
- Storage of natural gas rose 39BN cubic feet. Natural gas storage is below the minimum for this date during the past five years.
- According to Baker Hughes, In the past two weeks, the number of active oil rigs rose 14 to 888 and natural gas rigs rose 1 to 194.
- Factset reported, with 92% of S&P 500 companies reporting 3rd quarter earnings, the blended earnings increase was 25.7% from the 3rd quarter of last year. However, 61 companies reported negative guidance and 27 reported positive guidance.
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Loren C. Rex, CFP®, AIF®, MA Erik A Smith
President Managing Partner
Generations Financial Planning & Wealth Management 269-441-4143
77 E. Michigan Ave, Suite 140
Battle Creek, MI 49017
Carrie Fuce, Assistant 269-441-4091
Toll Free: 800-513-8180
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These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly.