U.S. and foreign stocks declined modestly this past week while the Russell 2000 index had the largest decline. The Russell 2000 index had the largest decline. The declines were attributed mainly due to uncertainty over the pending tax legislation. At this point the House and Senate versions have significant differences. I won’t go into the nuances as these are many, fluid and likely changing several times before both the Senate and House reach an agreement. It is entirely possible the Senate will eventually need to bring on board some Democrats to get a majority to pass the legislation. Expect more uncertainty before a final bill.
The 10 year Treasury note yield rose to 2.4% but is still below where it started the year. The dollar declined slightly against a basket of currencies. West Texas Intermediate Crude oil prices rose about 3% . Traders will be closely watching the upcoming OPEC meeting on November 30th. While both Saudi Arabia and Russia have talked in favor of extending the production cuts through the end of 2018 there is a significant chance, if there is an extension, it will disappoint the markets by being shorter than expected. Last week U.S. oil production hit an all-time high.
In the numbers, this week:
- Factset reported with 91% of the S&P 500 companies reporting, third quarter earnings are up 6.1% from the same period last year.
- The Labor Department reported initial claims for unemployment in the prior week rose 17,000 to a seasonally adjusted 239,000. The four-week moving average of claims fell 1,250 to 231,250, the lowest since early 1973.
- The Energy Information Administration’s Weekly Petroleum Data report is here wpsrsummary (9). In addition, the EIA reported
- Weekly field production of crude rose 67 thousand barrels per day in the prior week. At 9.62 million barrels per day, this is an all-time record.
- Natural gas in storage rose 15Bcf last week from the prior week. Storage is below the five year average at this time of year.
- Baker Hughes reported that oil drilling rigs rose 9 to 738. Gas drilling rigs were unchanged at 169.
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Loren C. Rex, CFP®, AIF®, MA Erik Smith
President Managing Partner
Generations Financial Planning & Wealth Management 269-441-4143
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Carrie Fuce, Assistant 269-441-4091
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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.