Flying turkeys? Turkeys may not be able to fly, but US Stocks surely did on Wednesday in preparation for Thanksgiving. Investors gave thanks on Wednesday as markets reached new highs.
- Economics 101. There was a flurry of economic data released on Wednesday suggesting that the US economy is hanging in there. Annualized GDP quarterly growth was revised up to +2.1% from +1.9% beating expectations. Durable Goods Orders rose by +0.6% compared to last month’s -1.4% pullback, beating expectations for further declines. Personal Spending increased by +0.3% compared to last month’s growth of +0.2%, showing that the consumer remains steadfast. The Core PCE Deflator came in below expectations at +1.6% year over year indicating that inflation is not a problem and possibly giving the Fed some more room to ease rates, if necessary.
- The survey says. The Federal Reserve releases its Beige Book summary of anecdotal national economic conditions monthly. The latest version indicated that there was “stable to moderate” growth in consumer spending and that manufacturing was slightly improved from the prior survey. The overall tone of the report was moderately positive, which is a sign that the economy may be stabilizing.
- Headstrong Hong Kong. WHILE YOU ATE TURKEY, the President signed the Hong Kong Human Rights and Democracy Act of 2019. Though it is largely a symbolic step, it is a slap in the face to Beijing, leaving investors wondering what China may do in response… in addition to the stream of rhetoric that followed.
- Tale of retail. Here we go again… it’s Black Friday, the official start to the holiday shopping season. The 4th quarter for most retailers is their strongest. Aside from providing us a good view into the health of corporate profits in the retail sector, 4Q retail sales will give us another good read on consumer confidence. There it is, I mentioned it, my favorite obsession: the consumer! This year, we have one less week of Holiday shopping because of the calendar, but the consumer seems poised to make this another one for the record books as employment remains strong and consumer confidence, though slightly weaker in recent months, still remains high. According to Adobe, e-commerce sales are expected to be $7.5 billion on Black Friday and $9.4 billion on Cyber Monday.
Markets advanced on Wednesday on positive economic data and high hopes for the holiday shopping season. The S&P500 climbed by +0.42% to a new high, the Dow Jones Industrial Average traded up +0.15% to a new high, the Russell 2000 jumped by +0.61%, and the NASDAQ Composite Index popped by +00.66% to a new high. Bonds slipped and 10-year treasury yields climbed by +2 basis points to 1.76%.
– Today the Stock Market will close early at 1:00 PM EST and Bonds will stop trading at 2:00 PM EST.
– Next week we have manufacturing and services PMI’s, Factory Orders, Construction Spending, the final read for Durable Goods Orders, and University of Michigan Sentiment. The show-stopper will be the monthly employment situation which will be released by the Bureau of Economic Analysis on Friday. Check back on Monday morning for the details.
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