Shifting trade policy perceptions remained the dominant factor for the stock market. There were no surprises in the FOMC minutes. While the economic reports were largely ignored, the data remained consistent with a mixed outlook – continued support for consumer spending growth, but ongoing weakness in business investment (this will be a key theme as we head into 2020).
The UM Consumer Sentiment Index edged up to 96.8 in the full-month reading for November, vs. 95.7 at mid-month and 95.5 in October. The report noted more pronounced partisan differences among consumers, but there is also a sharp divide between business and consumer sentiment: “one side anticipates a recession, while the other side expects an uninterrupted expansion in the year ahead – there is ample reason for both optimism as well as pessimism, but not the extreme differences voiced by these groups.”
Next week is a holiday week, but with some important data. Revisions from the advance GDP estimate to the 2nd and 3rd estimates have tended to be small in recent years (larger changes show up in the annual benchmark revisions). The advance economic indicators, durable goods shipments and inventories, and personal income/spending are all October figures, but are likely to suggest a downshift in GDP growth in 4Q19.
Indices
| |
Last |
Last Week |
YTD return % |
| DJIA |
27766.29 |
27781.96 |
19.03% |
| NASDAQ |
8506.21 |
8482.10 |
28.20% |
| S&P 500 |
3103.54 |
3094.04 |
23.80% |
| MSCI EAFE |
1969.07 |
1972.37 |
14.49% |
| Russell 2000 |
1583.99 |
1572.37 |
17.46% |
Bond Rates
| |
Last |
1 month ago |
| 2-year treasury |
1.60 |
1.58 |
| 10-year treasury |
1.77 |
1.77 |
| 10-year municipal (TEY) |
2.33 |
2.34 |
Treasury Yield Curve – 11/22/2019
As of close of business 11/21/2019
S&P Sector Performance (YTD) – 11/22/2019
As of close of business 11/21/2019
Economic Calendar
| November 26 |
— |
Advance Economic Indicators (October) |
| |
— |
New Home Sales (October) |
| |
— |
CB Consumer Confidence (November) |
| November 27 |
— |
Jobless Claims (week ending November 23) |
| |
— |
Real GDP (3Q19, 2nd estimate) |
| |
— |
Durable Goods Orders (October) |
| |
— |
Chicago Business Barometer (November) |
| |
— |
Personal Income and Spending (October) |
| |
— |
Pending Home Sales Index (October) |
| |
— |
Fed Beige Book |
| November 28 |
— |
Thanksgiving Holiday (markets closed) |
| December 2 |
— |
ISM Manufacturing Index (November) |
| December 6 |
— |
Employment Report (November) |
| December 11 |
— |
FOMC Policy Decision |
| December 11 |
— |
Retail Sales (November) |
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 November 21, 2019.
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