Archive for ND&S Updates

ND&S Weekly Commentary 12.09.19 – The Week Ends on a Positive Note

December 9, 2019 

A strong U.S. jobs report released Friday mostly wiped out stock losses from earlier in the week. The U.S. Labor Department reported that employers added 266,000 jobs in November, well above estimates for 184,000. The report also showed unemployment dropped to 3.5%, a 50 year low. Separately, a report on consumer sentiment showed an increase from the prior month. This week look for economic reports on CPI, PPI and retail sales. Based on reports for black Friday and on-line sales, retail sales should continue to be a positive for the U.S. economy as the consumer remains healthy and supportive of the economy.

Stocks ended the week little changed with the S&P 500 up 0.21% and the DJIA and the NASDAQ down 0.06% and 0.08%, respectively. Historically December has been one of the best months of the year. The DJIA, S&P 500 and Russell 2000 indexes have ended higher in December more than another month. International equities ended the week on a positive note with developed markets up 0.38% and emerging markets up 0.88%. For the week, the best performing sectors were energy, consumer staples and healthcare. The worst sector was industrials. In fixed income, interest rates rose last week as the rate on the 10 year U.S. Treasury went from 1.78% to 1.84%.

The Federal Reserve will hold its final meeting of the year this week and is expected to leave interest rates unchanged. Investor attention will also have an eye on trade relations with China as Sunday’s December 15th deadline for increased tariffs on Chinese goods takes effect.

“It always seems impossible until it’s done.” – Nelson Mandela

Let’s Give Thanks

December 2, 2019 

Investors and traders should be thankful for the financial markets that keep on giving. Once again the US stock market reached all-time highs during the Thanksgiving Day holiday week. Improving economic data and progress towards a US and China Phase 1 trade deal created a positive and optimistic tone throughout the week.

The DJIA rose 0.75%, the S&P 500 added 1.04% and the Nasdaq finished up 1.72%. Developed international markets, as measured by the MSCI EAFE, also fared well increasing 0.52%. Emerging market equities were the only laggard down 0.80%. Despite recession worries and political turmoil in Washington, consumers, representing 70% of our GDP, are still spending. 3Q19 GDP was increased to 2.1% outpacing expectations for a 1.9% increase. The solid job market with historically low unemployment, a 3% increase in wages, and lower debt burdens have given consumers a lot to be thankful for and optimistic about their future. As a result, Black Friday hit a record $7.4 billion in US online sales with $2.9 billion in purchases made directly from smartphones.

For the week, consumer discretionary was the best sector climbing 1.78% with info tech coming in next up 1.73%. The energy sector continues to lag down 1.55% due to oversupply worries and US and China trade tensions. Fixed income assets moved sluggishly with the 10 year US Treasury remaining at around a 1.78% yield. The safe haven investment, gold, also was down 0.3% and declined 4% in November, its worst month in three years.

There will be economic reports on employment, consumer confidence, and Markit/ISM manufacturing and service PMIs. We would not be surprised if the markets paused for a while given the market’s healthy advance recently.

“Feeling gratitude and not expressing it is like wrapping a present and not giving it.” – William Arthur Ward