Weekly Economic Update November 27, 2017
“There are two ways of spreading light: to be the candle or the mirror that reflects it.”
– Edith Wharton
Some investors play a guessing game: they watch Wall Street and try to pick future winners. Other investors recognize that diversification may improve their chances of holding shares in such companies without a lot of guessing.
Tom figures out that an old grandfather clock is one minute fast every hour. How can Tom manipulate the clock to tell the correct time twice a day, while keeping it running at the same pace?
Last week’s riddle:
They can darken the dark; they can also lighten the intensity of the light. What are they?
Last week’s answer:
CONSUMER SENTIMENT DECLINES FOR NOVEMBER
The University of Michigan’s monthly gauge of how households perceive current and future economic conditions ended the month at a mark of 98.5. Compared to the 100.7 final October reading, this was a disappointment. Still, the index was up 5.0 points year-over-year. Richard Curtin, the economist in charge of the consumer survey, noted that the index has hovered near “the highest levels since 2004” since January.1
HOME BUYING GETS A FALL BOOST
Existing home sales rose 2.0% in October, surpassing the consensus 0.7% gain forecast by analysts polled by Investing.com. Elsewhere in its latest monthly report, the National Association of Realtors revised September’s minor advance in home buying down to 0.4%.2
LEADING INDICATORS TAKE A MAJOR LEAP
After a decline of 0.2% in September, the Conference Board’s index of leading economic indicators soared 1.2% for October. This was double the gain forecast in a Reuters survey of economists. This surge in the 10-component index may signal an impressive fourth quarter.3
A NEW MILESTONE FOR A MARKET BENCHMARK
Stocks regained their momentum in time for Thanksgiving. During an abbreviated trading week, the S&P 500 settled above 2,600 for the first time, closing at 2,602.42 Friday and going +0.93% across three-and-a-half days. Weekly gains also came for the Nasdaq Composite (1.57%) and the Dow Jones Industrial Average (0.86%); the Nasdaq finished the week at 6,889.16; the Dow, at 23,557.99. The Nasdaq was up 5.07% month-over-month as of Friday’s closing bell.4,5
THIS WEEK: Monday, the Census Bureau presents data on October new home sales. The latest S&P/Case-Shiller home price index and the October Conference Board consumer confidence index both appear Tuesday. On Wednesday, Federal Reserve chair Janet Yellen testifies on the U.S. economic outlook in Congress, and investors also consider the second federal government take on Q3 GDP, a new Fed Beige Book, and the NAR’s latest pending home sales index. October personal spending data, the October PCE price index, and a new initial unemployment claims report arrive Thursday. The Institute for Supply Management releases its November snapshot of the U.S. factory sector Friday.
|% CHANGE||Y-T-D||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||11/24 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.50%||0.47%||-0.72%||1.63%|
Sources: wsj.com, bigcharts.com, treasury.gov – 11/24/175,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.
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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
1 – sca.isr.umich.edu/ [11/22/17]
2 – investing.com/economic-calendar/existing-home-sales-891 [11/22/17]
3 – cnbc.com/2017/11/20/october-leading-indicators-index.html [11/20/17]
4 – finance.google.com/finance?q=INDEXSP%3A.INX&ei=02cYWuG2DYfSjAHDvqqQDA [11/24/17]
5 – markets.wsj.com/us [11/24/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F25%2F16&x=0&y=0 [11/24/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F25%2F16&x=0&y=0 [11/24/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F25%2F16&x=0&y=0 [11/24/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F23%2F12&x=0&y=0 [11/24/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F23%2F12&x=0&y=0 [11/24/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F23%2F12&x=0&y=0 [11/24/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F23%2F07&x=0&y=0 [11/24/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F23%2F07&x=0&y=0 [11/24/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F23%2F07&x=0&y=0 [11/24/17]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/24/17]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/24/17]
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