Weekly Update - November 30, 2018
- After two down weeks, stocks rose in a series of choppy sessions that stabilized most indexes but did not reclaim earlier highs. Sentiment jumped when Federal Reserve Chair Powell said interest rates seemed “just below” neutral, implying fewer hikes might lie in the future than previously thought. The boost weakened, however, when the November FOMC meeting minutes showed Fed officials to be less sure about the future rate path. While investors took heart from encouraging holiday shopping news, they did not lift technology stocks out of the doldrums.
- Oil prices fell below $50 per barrel on fears of slowing global growth and oversupply, but ended the week flat. The 10-year U.S. Treasury yield fell to 3% as investors bet on a slower rate path ahead. The U.S. dollar rose against a basket of currencies to its highest level in more than a year. Gold prices fell slightly as a result.
- The Conference Board index of U.S. consumer confidence slipped slightly from October’s 18-year high of 137.9, to 135.7 in November. The headline components showed mixed readings: assessments of the present economic situation nudged upward, while expectations for the future fell.
- October personal income rose 0.5%, and personal spending climbed 0.6%, ahead of September’s readings of 0.2% for both metrics. October core PCE, a key inflation gauge for the Fed, was up 0.1% on the month and 1.8% year-over-year.
- More U.S. shoppers chose the computer over the mall on Black Friday, continuing a trend from previous years. Black Friday online sales totaled a record $6.22 billion, an increase of more than 23%, according to Adobe Analytics.
- The housing market continued its disappointing year as rising mortgage rates impeded momentum. The National Association of Realtors’ pending home sales index fell another 2.6% in October. New home sales fell 8.9% in October to their lowest level since March 2016.
- The Chicago Fed National Activity Index (CFNAI) rose from 0.14 in September to 0.24 in October, indicating that the rate of economic growth remained above trend and continued to accelerate. The three month moving average remained well below the 0.70 threshold associated with sustained, increasing inflation.