Major U.S. stock indices ended a volatile week with modest gains while emerging markets stocks fell.  Traders anticipate rate cuts next year as inflation continues to move closer to the FED’s 2.0% goal.  The FED’s preferred gauge, the core PCE price index, rose 3.2% from a year ago.

Treasury bond yields were mixed with the 30-year bond yield at 4.052% and the 10-Year note at 3.897%.  Freddie Mac reported that the average 30-year mortgage rate fell to 6.67%.  Crude oil rose to $73.60 a barrel and natural gas rose to $2.612 per MMBTUs.  The U.S. dollar index fell to 101.72 and gold rose to $2064.80 an ounce.

• The National Association of Realtors reported existing home sales rose 0.8% in November and were down 7.3% from a year ago.
• The Commerce Department reported:
  • Housing starts surged a seasonally adjusted 14.6% in November and are 9.8% above last November as lower mortgage rates and mild weather spurred activity.
    • Single family starts rose 18.0% and are 42.2% above a year ago.
    • Multifamily starts (5 or more units) rose 8.9% in November but are down 33.7% from a year ago.
    • Building permits, a sign of future housing starts, fell 2.5% in November but are up 4.1% from a year ago.
  • It’s second revision to third quarter gross domestic product was revised from a 5.2% annual growth rate to a 4.9% annual growth rate.
    • GDP is revised as more data becomes available.
    • Consumer spending and imports were revised down.
  • Personal consumption expenditures for November rose 0.2%.
    • The PCE price index fell 0.1% in November and is up 2.6% from a year ago.
    • Excluding volatile food and energy, core PCE prices rose 0.1% in November and are up 3.2% year over year.  This is the FED’s preferred measure of inflation.
    • Personal incomes rose 0.4% in November.
  • Advance durable goods orders rose 5.4% in November following a 5.1% decline in October.
    • The sharp October drop and November rebound were affected by the UAW strike.
    • Excluding transportation durable goods orders rose 0.5%.

• The Labor Department reported:
  • Seasonally adjusted first-time claims for unemployment were 205,000, an increase from the previous week’s revised level of 203,000.
    • The 4-week moving average of claims, designed to smooth out volatility, was 212,000, an decrease of 1,500 from the previous week’s revised level. 
    • For the full unemployment report go here:  https://www.dol.gov/ui/data.pdf .
• 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 13.1MM BPD to 13.3MM BPD.
  • Natural gas storage fell 87BN cubic feet and is about the highest it has been during the past five years at this time of year.
• Baker Hughes reported the number of oil rigs fell 3 to 498 and the gas rigs rose 1 to 120.

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.

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

Consumer Price Index Summary – 2023 M11 Results (bls.gov)

Producer Price Indexes – November 2023 (bls.gov)