Blog Post

Trade Uncertainty Offset by Positive Economic Number and Earnings

Stocks ended the week with modest losses as trade signals vacillated from one day to the next.  Positive housing and business activity numbers and retail earnings helped offset trade uncertainty.

Congress passed a short term spending measure which President Trump signed funding the government until December 20th as the presidents demand for more border wall funding prevented a long term deal.

The Federal reserve released minutes on Wednesday from the October meeting.  Most notably the minutes referenced: “Risks to the outlook associated with global economic growth and international trade were still seen as significant despite some encouraging geopolitical and trade-related developments.”

The 10-year Treasury yield fell to 1.77%.  Crude oil gained slightly to $57.90 a barrel.  The U.S. dollar gained against a basket of currencies and gold prices fell to $1462.40 an ounce.

In economic numbers this week:

  • IHS Markit reported its U.S. composite Purchasing Manager’s index including both manufacturing and services increased to 51.9 in November from 50.9 in October.
  • The Commerce Department reported U.S. housing starts rose 3.8% in October.  Building permits, an indicator of future housing starts, rose 5%.  Single family starts rose 2% and single family permits rose 3.2%.   Multifamily starts rose 8.6% and permits rose 8.2%
  • The National Association of Realtors reported
    • Existing home sales rose 1.9% in October from September and were up 4.6% from last October.  Existing home sales make up the majority of home sales.  Better mortgage rates were attributed to the increase.
    • The median sales price of an exiting home was $270,900 in October, up 6.2% from the previous year.
  • The Labor Department reported first time claims for unemployment were unchanged at a seasonally adjusted 227,000.  The four week moving average of claims rose to 221,000.
  • The EIA weekly oil report is here wpsrsummary (3).  Also, the EIA reported in the past week:
    • Field production of crude oil was unchanged at 12.8MM barrels per day.
    • Natural gas storage fell by 94BN cubic feet and is and is slightly below the five year average at this time of year.
  • Factset reported with 96% of S&P 500 companies reporting Q3earnings, the blended earnings decline was 2.2%.  75% of companies have beaten their estimates which is above the five year average.
  • Baker Hughes reported the number of active oil rigs fell 3 to 671 and the number of active gas rigs was unchanged at 129.

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Best Regards,

Loren C. Rex, CFP®, AIF®, MA                                                       Erik A Smith, AIF®

President                                                                                               Managing Partner

Generations Financial Planning & Wealth Management           269-441-4143

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Battle Creek, MI  49017

Tel 269-441-4090

Carrie Fuce, Assistant 269-441-4091

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Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC.  Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor.  Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.

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.


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