Major stock indices ended the week lower with the biggest decline in the Nasdaq 100 which had its worst week since April. The shutdown has now set a record as the longest in U.S. history. Despite strong corporate earnings, traders were concerned about valuations after the year’s large gains and indications of a weakening labor market.
Treasury bond yields rose with the 30-year bond yield at 4.699% and the 10-Year note at 4.096%. Freddie Mac reported that the average 30-year mortgage rate rose to 6.22%. Crude oil fell to $59.81 a barrel and natural gas rose to $4.553 per MMBTUs. The U.S. dollar fell to 99.55 and gold rose to $4012.40 an ounce.
In economic reports last week:
- S&P Global released its purchasing manager’s indices for October. Keep in mind that anything over 50 represents expansion and anything under 50 represents contraction.
- U.S. manufacturing PMI rose from 52.0 to 52.5.
- U.S. services PMI rose from 54.2 to 54.8.
- Canada manufacturing PMI rose from 47.7 to 49.6.
- Canada services PMI rose from 46.3 to 50.5.
- Mexico manufacturing PMI fell from 49.6 to 49.5.
- China manufacturing PMI fell from 51.2 to 50.6.
- China services PMI fell from 52.9 to 52.6.
- Japan manufacturing PMI fell from 48.5 to 48.2.
- Eurozone manufacturing PMI rose from 49.8 to 50.0.
- Eurozone services PMI rose from 51.3 to 53.0.
- Challenger, Gray & Christmas Inc. reported that companies announced over 153,000 job cuts in October, the highest level of October job cuts in the past 20 years. The announcements typically precede actual job losses by a couple of months.
- ADP announced that non-government employers added 42,000 jobs in October.
- The Federal Reserve reported that consumer credit rose at an annual rate of 2.7% in the third quarter.
- Revolving credit rose at a 2.0% rate.
- Non-revolving credit rose at a 2.9% rate.
- The EIA weekly oil report is here: Weekly Petroleum Status Report. Also, the EIA reported in the prior week:
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- Field production of crude oil rose from 13.644MM BPD to 13.651MM BPD.
- Natural gas storage rose 33BN cubic feet and was above its average level during the past five years at this time of year.
- Baker Hughes reported the number of oil rigs was unchanged at 414 and the number of natural gas rigs rose 3 to 128.
- Factset reported with 91% of S&P 500 companies reporting that the blended earnings increase was 13.1%.
Please call us if you have any questions.
Loren Rex – Emeritus
Erik A Smith, AIF® – President & C.E.O.
Nicholas Acri, CFP® – Partner & Wealth Advisor
Dylan Thomas, CFP® – Partner & Wealth Advisor
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
https://www.pmi.spglobal.com/public/release/pressreleases
