Major stock indices ended the week mixed with a substantial gain in the Nasdaq 100 index and a decline in the Dow Jones 30 Industrials and the Russell 2000 small cap index. Economic data was mostly positive except for the sharp increase in revolving credit.
Treasury bond yields fell with the 30-year bond yield at 4.344% and the 10-Year note at 4.190%. Freddie Mac reported that the average 30-year mortgage rate fell to 6.69%. Crude oil fell to $68.32 a barrel and natural gas fell to $3.066 per MMBTUs. The U.S. dollar index fell to 105.92 and gold fell to $2649.50an ounce.
In economic reports this week:
- S&P Global released its purchasing manager’s indices for November. Remember anything above 50 represents expansion and anything under 50 represents contraction.
- US manufacturing PMI rose from 48.5 to 49.7.
- US services PMI rose from 55.0 to 56.1.
- Mexico manufacturing rose from 48.4 to 49.9.
- Canada manufacturing rose from 51.1 to 52.0.
- Canada services rose from 50.4 to 51.2.
- China manufacturing rose from 50.3 to 51.5.
- China services fell from 52.0 to 51.5.
- Japan manufacturing fell from 49.2 to 49.0.
- Japan services rose from 49.7 to 50.5.
- Eurozone manufacturing fell from 46.0 to 45.2.
- Eurozone services fell from 51.6 to 49.5.
- MarketLines reported that U.S. sales of light vehicles rose 2.6% in the month of November and were up 9.5% from a year earlier.
- The Federal Reserve reported that consumer credit rose at a 4.5% annual rate in October.
- Revolving credit rose at a 13.9% annual rate.
- Non-revolving credit rose at a 1.1% annual rate.
- The Commerce Department reported:
- Construction spending rose 0.4% in October and is up 5.0% from a year ago.
- Construction spending rose 0.4% in October and is up 5.0% from a year ago.
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- Manufactured goods order rose 0.2% in October following declines in August and September.
- Manufactured goods order rose 0.2% in October following declines in August and September.
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- The trade deficit fell 11.9% in October as both exports and imports fell.
- The trade deficit fell 11.9% in October as both exports and imports fell.
- The Labor department reported:
- Job openings were little changed at 7.7MM at the end of October.
- Hires were 5.5MM.
- Total separations were 5.3MM, 3.3% of workers.
- Quits were 3.3MM, 2.1% of workers.
- Layoffs were 1.6MM or 1.0% of workers.
- Job creation rebounded in November to 227,000 but the increase was helped by the end of the Boeing strike and recovery from hurricanes.
- The unemployment rate rose slightly to 4.2%.
- Average hourly earnings rose 0.4% in November and were up 4.0% from last November.
- Seasonally adjusted first-time claims for unemployment were 224,000, an increase of 9,000 from the previous week’s revised level.
- The 4-week moving average of claims, designed to smooth out volatility, was 218,250 an increase of 750 from the previous week’s revised level.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
- Job openings were little changed at 7.7MM at the end of October.
- The EIA weekly oil report is here: http://ir.eia.gov/wpsr/wpsrsummary.pdf . Also, the EIA reported in the prior week:
- Field production of crude oil rose from 13.493MM BPD to 13.513MM BPD.
- Natural gas storage fell 30BN cubic feet and is above highest level during the past five years at this time of year.
- Baker Hughes reported the number of oil rigs rose 5 to 482 and the number of natural gas rigs rose 2 to 102.
Please call us if you have any questions.
Loren Rex – Emeritus
Erik A Smith, AIF® – President & C.E.O.
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. The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange (more than 2500 stocks).
Sources:
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W
https://ir.eia.gov/ngs/ngs.html
https://www.freddiemac.com/pmms
https://www.wsj.com/market-data?mod=nav_top_subsection
https://bakerhughesrigcount.gcs-web.com/na-rig-count
https://www.census.gov/economic-indicators
