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Weekly Update – November 08, 2019

  • Global stock markets delivered positive results for the week. Progress in China– United States trade talks drove an upswing; though a late pullback tempered the final tally, the major U.S. indexes finished in the black. The positive trade news, upbeat third-quarter earnings and continuing job strength boosted optimism about economic growth, prompting investors to shift from U.S. Treasury securities toward cyclical stocks.
  • The yield on the ten-year U.S. Treasury note rose as high as 1.96% before settling near 1.93%; other government bond yields also rose. Oil prices were choppy but ended the week slightly higher. Gold prices descended as Treasury yields climbed. The U.S. dollar rose against a basket of major currencies.
  • With 89.2% of S&P 500 companies reporting third-quarter results, 74.2% have exceeded earnings per share expectations, while 58.0% have beaten revenue expectations. As of November 8, 2019, Refinitiv estimated the S&P 500’s third quarter earnings growth rate at -0.5% and its 12-month forward P/E ratio at 17.8. CVS Health, Ferrari and Humana impressed, whereas Altice U.S., Becton Dickinson and Shake Shack disappointed.
  • The University of Michigan Index of Consumer Sentiment ticked up to 95.7, from 95.5 in October. The Current Economic Conditions index declined month-over-month, from 113.2 to 110.9. The Index of Consumer Expectations rose from 84.2 in October to 85.9 in November.
  • The ISM non-manufacturing index’s October reading of 54.7 beat the 53.3 estimate, and was up from September’s 52.6. Analysts said the report was in line with a weakening trend over the past year. The final October IHS Markit Services PMI of 50.6 declined from the flash reading of 51 and was down 0.3 month-over-month. New business growth contracted for the first time since data began a decade ago, employment fell by the most in almost a decade.
  • According to the Job Openings and Labor Turnover Summary, the number of job openings edged down to 7.0 million during September. Over the month, hires and separations were little changed at 5.9 million and 5.8 million. Over the 12 months ended in September, hires totaled 69.9 million and separations totaled 67.4 million, yielding a net employment gain of 2.5 million.

CPWM Weekly Market Monitor (2019.11.08)

 

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