Market Commentary
by Scott J. Brown, Ph.D., Chief Economist

There was a lot of economic data in the holiday-shortened week, but trade deal perceptions remained the dominant factor. Fed Chair Powell said that monetary policy was “well-positioned” to support economic growth, a strong labor market, and inflation near the 2% goal. However, he added that the Fed would react “if the outlook changes materially.”

Real GDP rose at a 2.1% annual rate in the 2nd estimate for 3Q19 (vs. +1.9% in the advance estimate), mostly due to faster inventory growth (which is likely to slow in 4Q19). Personal income was flat in October, reflecting a reduction in farm subsidies (aggregate wage growth was moderate). Consumer spending rose modestly after adjusting for inflation. Ex-food and energy, the PCE Price Index edged up 0.1%, up 1.6% year-over-year (still short of the Fed’s goal). The Conference Board’s Consumer Confidence Index showed improved expectations in November, but weaker ratings of current conditions (consistent with good growth in consumer spending, but relative softness in the overall economy).

Next week, fresh November data begin to arrive. The ISM manufacturing survey is likely to have remained in contraction. The ISM’s non-manufacturing data should remain consistent with moderate growth in the overall economy. Some 42,000 strikers will return, boosting the monthly change in nonfarm payrolls, but likely masking a general downtrend in job growth (more indicative of labor market constraints than economic weakness). In the House Judiciary Committee’s hearing on the impeachment inquiry, the question will be what constitutes an impeachable offense.

Indices

Consumer Money Rates

Currencies

Commodities

Bond Rates

Treasury Yield Curve – 11/29/2019

 

As of close of business 11/27/2019

S&P Sector Performance (YTD) – 11/29/2019

 

As of close of business 11/27/2019

Economic Calendar

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Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business November 27, 2019.