U.S. stocks were up sharply last week on the heels of the U.S. election and another FED rate cut. The biggest gain was in the Russell 2000 small cap index. Developed international and emerging markets were down slightly.
The Federal Reserve met and cut its benchmark interest rate 0.25% to a range of 4.5% to 4.75%. Chairman Powell said that the FED will decide meeting by meeting whether to cut more or not. He also indicated that he intends to complete his term ending May 15, 2026.
The U.K. cut its benchmark interest rate 0.25% to 4.75%.
OPEC+ again agreed to delay a production increase scheduled for December by a month. This comes as weak demand from China and rising production outside of OPEC+ are causing higher inventories.
Treasury bond yields were mixed with the 30-year bond yield at 4.730% and the 10-Year note at 4.310%. Freddie Mac reported that the average 30-year mortgage rate rose to 6.79%. Crude oil rose to $70.43 a barrel and natural gas rose to $2.665 per MMBTUs. The U.S. dollar index rose to 104.95 and gold fell to $2691.70 an ounce.
In economic reports this week:
- S&P Global released the remaining purchasing manager’s indices for October. Keep in mind that anything over 50 represents expansion and anything under 50 represents contraction.
- Eurozone manufacturing PMI rose from 45.0 to 46.0.
- Eurozone services PMI rose from 51.4 to 51.6.
- U.S. services PMI fell from 55.2 to 55.0.
- Canada services PMI rose from 46.4 to 50.4.
- China services PMI rose from 50.3 to 52..0.
- Japan services fell from 53.1 to 49.7.
- The Federal Reserve reported that consumer credit rose at a seasonally adjusted annual rate of 3.2% in the third quarter.
- Revolving credit rose 2.8%.
- Non-revolving credit rose 3.4%.
- The Commerce Department reported:
- New orders for manufactured goods fell a seasonally adjusted 0.5% in September after falling 0.8% in August.
- New orders for manufactured goods fell a seasonally adjusted 0.5% in September after falling 0.8% in August.
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- Wholesale inventories fell 0.2% in September.
- Wholesale inventories fell 0.2% in September.
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- The trade deficit rose 19.2% in September as exports fell and imports rose.
- The trade deficit rose 19.2% in September as exports fell and imports rose.
- The Labor department reported:
- Seasonally adjusted first-time claims for unemployment were 221,000, an increase of 3,000 from the previous week’s revised level.
- The 4-week moving average of claims, designed to smooth out volatility, was 227,250 an increase of 9,750 from the previous week’s revised level.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
- Seasonally adjusted first-time claims for unemployment were 221,000, an increase of 3,000 from the previous week’s revised level.
- 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 was unchanged at a record 13.5MM BPD.
- Natural gas storage rose 69BN cubic feet and is at the highest level during the past five years at this time of year.
- Baker Hughes reported the number of oil rigs was unchanged at 479 and the number of natural gas rigs was unchanged at 102.
- Factset reported with 91% of S&P 500 companies reporting Q3 earnings the blended earnings increase is 5.3% from a year ago.
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
