Weekly Market Snapshot

by Scott Brown of Raymond James, 10/28/19

It was a thin week for economic data. Both new and existing home sales were reported lower in September, although the trends are generally higher. Durable goods orders fell 1.1% in September, reflecting the strike at GM and ongoing problems at Boeing. Ex-transportation, orders slipped 0.3%, with mixed results across industries.

Boris Johnson reached a Brexit agreement with the European Union, but the prime minister failed to get that through Parliament, leading to another delay. Some progress was reported in trade talks with China. Earnings reports were mixed.

Next week, the economic calendar is as busy as it gets. While some components are still missing, real GDP is likely to have risen at a 1.6-1.8% annual rate in the advance estimate for 3Q19, reflecting moderate growth in consumer spending and further weakness in business fixed investment. Monthly figures on consumer spending are expected to show a loss of momentum ending the quarter. Some 46,000 striking GM workers will disappear from the nonfarm payrolls total in October (but will return when the strike is settled). Adjustments for the school year may add noise and we could see some hiring for the 2020 census, but the underlying trend in job growth is expected to slow (we need less than 100,000 per month to absorb new entrants into the workforce). Average hourly earnings are expected to pick up following no change in September (watch for revisions). The ISM Manufacturing Index should show that the factory sector remains in contraction. While Fed officials have been divided on the appropriate course of monetary policy, financial markets have largely factored in another insurance cut in short-term interest rates and the Federal Open Market Committee rarely acts against such expectations.

Indices

	Last	Last Week	YTD return %
DJIA	26496.67	26201.04	13.59%
NASDAQ	7950.78	7872.27	19.83%
S&P 500	2938.13	2910.63	17.20%
MSCI EAFE	1853.25	1849.26	7.75%
Russell 2000	1485.36	1486.35	10.14%

Consumer Money Rates

	Last	1 year ago
Prime Rate	5.00	5.25
Fed Funds	1.80	2.16
30-year mortgage	3.70	4.94

Currencies

	Last	1 year ago
Dollars per British Pound	1.221	1.320
Dollars per Euro	1.097	1.152
Japanese Yen per Dollar	107.48	112.27
Canadian Dollars per Dollar	1.333	1.307
Mexican Peso per Dollar	19.571	19.155

Commodities

	Last	1 year ago
Crude Oil	52.59	73.17
Gold	1512.80	1193.40

Bond Rates

	Last	1 month ago
2-year treasury	1.54	1.76
10-year treasury	1.66	1.84
10-year municipal (TEY)	2.09	2.23

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 October 24, 2019.

© Raymond James

© Raymond James

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