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Weekly Market Snapshot

Weekly Market Snapshot

  • 11.29.19
  • Economy & Policy
  • Commentary

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

  Last Last Week YTD return %
DJIA 28164.00 27766.29 20.73%
NASDAQ 8705.18 8506.21 31.20%
S&P 500 3153.63 3103.54 25.80%
MSCI EAFE 1982.23 1969.07 15.25%
Russell 2000 1634.10 1583.99 21.17%

Consumer Money Rates

  Last 1 year ago
Prime Rate 4.75 5.25
Fed Funds 1.55 2.18
30-year mortgage 3.76 4.84

Currencies

  Last 1 year ago
Dollars per British Pound 1.291 1.279
Dollars per Euro 1.101 1.139
Japanese Yen per Dollar 109.51 113.48
Canadian Dollars per Dollar 1.328 1.328
Mexican Peso per Dollar 19.472 20.235

Commodities

  Last 1 year ago
Crude Oil 58.11 51.45
Gold 1460.80 1230.40

Bond Rates

  Last 1 month ago
2-year treasury 1.63 1.52
10-year treasury 1.77 1.68
10-year municipal (TEY) 2.31 2.28


Treasury Yield Curve – 11/29/2019

Treasury Yield Curve 

As of close of business 11/27/2019


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


S&P Sector Performance Chart 

As of close of business 11/27/2019


Economic Calendar

December 2  —  ISM Manufacturing Index (November)
December 4  —  ADP Payroll Estimate (November)
 —  ISM Non-Manufacturing Index (November)
 —  House Judiciary Hearing on Impeachment
December 5  —  Challenger Job-Cut Report (November)
 —  Jobless Claims (week ending December 30)
 —  Trade Balance (October)
 —  Factory Orders (October)
December 6  —  Employment Report (November)
 —  UM Consumer Sentiment (mid-December)

 

All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc. and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor's returns. U.S. government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.

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.

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