Month: November 2018

Equities rallied today, ahead of the G20 meetings in Buenos Aires. The S&P 500 Index gained 0.82 percent, while the Dow Jones Industrial Average and NASDAQ both gained 0.79 percent. The Russell 2000 Index increased 0.52 percent.

Technology stocks led the market for the week, pulling the Nasdaq higher by 5.64 percent. SPDR Technology (XLK) gained 6.05 percent.

The consumer discretionary and communication services sectors advanced this week. SPDR Consumer Discretionary (XLY) increased 5.77 percent and SPDR Communication Services (XLC) 4.99 percent. AT&T (T) announced it will launch a streaming service to compete with Netflix (NFLX) and Disney+ (DIS). SPDR Healthcare (XLV) also was a leader this week. It gained 5.89 percent.

Federal Reserve Chairman Powell said interest rates are close to their neutral rate, a significant shift from his comments two months ago. The minutes from the November Fed meeting backed up Powell’s comments. Treasury bond yields edged lower at the short-end of the curve but held steady at the long-end.

New home sales missed expectations in October at an annualized pace of 544,000. Weekly claims for unemployment edged up to 234,000 but remain near multi-decade lows.

Crude oil stabilized this week. It briefly dipped below $50 a barrel on Thursday but spent most of the week trading between $50 and $52 a barrel. Natural gas was more volatile. It bounced more than 10 percent on Wednesday. SPDR Energy (XLE) advanced 3.36 percent.

SPDR S&P 500 (SPY) gained 4.75 percent, MSCI Emerging Markets (EEM) 3.27 percent and iShares MSCI EAFE (EFA) 1.63 percent, respectively.

The stock market opened higher today, with the S&P 500 Index rallying 1.55 percent. The Dow Jones Industrial average gained 1.46 percent and the Nasdaq 2.06 percent. The Russell 2000 Index increased 1.16 percent. SPDR Financial (XLF) gained 2.06 percent and SPDR Technology (XLK) rose 2.26 percent.

November consumer confidence, revised third quarter GDP, October new home sales and weekly jobless claims highlight this week’s economic data. Analysts are expecting an increase in home sales to an annualized pace of 589,000.

The highlight of the week is the minutes from the prior Fed meeting. Some analysts have begun forecasting a dovish shift by the Federal Reserve. Speculators have also eased their rate hike expectations for 2019. Bond yields have been stable over the past week, including 30-year treasuries.

Salesforce.com (CRM), Cracker Barrel (CBRL), Bank of Nova Scotia (BNS), Weibo (WB), Tiffany & Co (TIF), Royal Bank of Canada (RY), Dicks Sporting Goods (DKS), The Children’s Place (PLCE), Sina Corp (SINA), Box Inc (BOX), Chico FAS (CHS), SodaStream (SODA), Dell Technologies (DVMT), VMware (VMW), Dollar Tree (DLTR), HP Inc (HPQ), Workday (WDAY), Palo Alto Networks (PANW), Abercrombie & Fitch (ANF) and Big Lots (BIG) all report earnings this week.

The stock market declined on the week with the S&P 500 losing 3.8 percent, the Dow Jones Industrial average 4.4 percent and the Nasdaq 4.3 percent. The Russell 2000 Index was the best performer among major indexes, declining only 2.48 percent.

Technology was again a laggard with SPDR Technology (XLK) slumping 6.05 percent.  Health care and consumer staples lost considerably less.  SPDR Health Care (XLV) declined 2.61 percent and SPDR Consumer Staples (XLP) 2.30 percent.

Housing starts and existing home sales increased from September’s growth pace. However, the homebuilder confidence index slipped from 68 to 60 in November as rising interest rates begin curbing customer interest in new homes.

Consumer sentiment shows a bifurcation between higher and lower income Americans. Falling stock prices lowered sentiment among wealthier households, but rising wages increased sentiment among the bottom third of wage earners. Weekly jobless claims for the week ending November 17 rose to 224,000. Claims remain near the lows of the year.

Crude oil tumbled to a new 52-week low on Friday. West Texas Intermediate traded with a $50 handle on Friday. Russia said it doesn’t see the need for production cuts yet. Investors are also turning their eye to U.S. production. Texas’ Permian Basin has thousands of wells that can produce profitably at $30 per barrel. New pipelines will break shipping bottlenecks in the coming year. Natural gas stabilized in the mid-$4 range as volatility collapsed.  SPDR Energy (XLE) declined 4.87 percent this week. Although lower oil prices weighed on the sector, the benefit will be consumers saving at the pump. Wholesale gasoline fell 11 cents on Friday alone.