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Weekly Updates

Weekly Update – November 16, 2018

  • Global stock markets delivered mixed results during yet another volatile week, following rising Brexit concerns. Stocks fell in the United States, Europe and Japan. By contrast, emerging Asian markets such as China posted gains despite the uncertainty surrounding U.S.-China trade tensions. In the U.S., fears that business growth might be slowing, and that inflation might be igniting, sparked volatility across sectors and market cap segments.
  • U.S. Treasury prices continued to rally, bolstered by the volatility in equity markets, pressing yields lower. The widely watched 10-year U.S. Treasury yield fell from 3.19% last week to 3.07%. Gold prices increased as Treasury yields declined and the U.S. dollar weakened slightly against major currencies.
  • Oil prices ended down after a sharp selloff in the middle of the week, spurred by worries about weaker demand amid oversupply. Earlier in the month, the U.S. authorized exemptions to eight countries, allowing them to continue importing Iranian oil despite sanctions. The size of the waivers surprised market participants.
  • U.S. retail sales increased by 0.8% in October, the largest increase since May. This was mainly due to purchases of motor vehicles and building materials to repair damage following Hurricane Florence. Analysts noted that real consumer spending is on pace to increase at an annualized 3.0% this quarter, down 1.0% from Q3, but still described as firm.
  • The Consumer Price index (CPI) in the U.S. rose to 252.83 in October, up 0.3% from September; in line with expectations and higher than September’s 0.1%. Gasoline prices were responsible for over a third of October’s increase, followed by a sharp rebound in prices for used cars. Core CPI, ex-food and energy, was up 0.2%, also in line with consensus and higher than September’s 0.1%.
  • The New York Empire State Manufacturing index increased 2.2 points in November, exceeding market expectations. Shipments, inventories, employment and average workweek increased. The Philadelphia Fed Manufacturing index fell to 12.9, well below October’s reading of 22.2. The decline was attributed to weaker new orders. U.S. industrial output rose October, as an increase in factory production offset a drop in mining and utilities output.


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